NEW DELHI: In one of the biggest hikes, the cash-strapped railways today raised passenger fares by 14.2 per cent for all classes and increased freight rates by 6.5 per cent to garner Rs 8000 crore annually through the pre-budget decision.
The decision, which will come into effect from June 25 and apply on basic fare, comes nearly a week after Prime Minister Narendra Modi said the country should be ready for “tough decisions”.
Due to the hike, a passenger will now have to shell out Rs 4354 for a journey between Delhi and Kolkata by AC-I on Delhi-Howrah Rajdhani, instead of Rs 3813.
Travel by AC-II on the same train will cost Rs 2508 instead of Rs 2197 and by AC-I, it will cost Rs 1728 instead of Rs 1514.
Journey between Delhi and Mumbai by Rajdhani will cost Rs 4073 instead of Rs 3567 in AC-I, Rs 2357 instead of Rs 2064 in AC-II and Rs 1617 instead of Rs 1416 in AC-III.
Travel between Delhi and Chennai by Delhi-Chennai Rajdhani will now cost Rs 4673 instead of Rs 5430 in AC-I, Rs 3129 instead of Rs 2740 in AC-II and Rs 2119 instead of Rs 1856 in AC-III.
Today’s decision marks implementation of an announcement of May 16, the day Lok Labha election results came, when the hike was announced but put on hold immediately.
In a flip-flop, the Ministry first announced that today’s hike will be implemented with immediate effect but later changed it to June 25, saying the officials needed time to execute it.
Announcing the decision, less than a month after the NDA government took over, Railway Minister Sadanand Gowda said, “I was forced to implement the order that was done by my predecessor. I am only withdrawing the withholding order.”
He said the interim budget presented by the previous government had assumed certain revenues on the basis of the proposed hike that was announced on May 16. “Meeting the annual expenditure would not be possible unless the revised rates as finalized by previous government is implemented, hence order of withdrawing implementation of revised fare and freight has been withdrawn,” said the Railway Ministry, which is incurring a loss of about Rs 900 crore per month in passenger segment.
“Accordingly, the revised passenger fare and freight rates and freight structure rationalization will come into effect from June 25, 2014,” it said in a statement.
The Railway Budget will be presented in Parliament in the first week of next month.
While a flat 10 per cent has been announced in all classes, an additional 4.2 per cent increase under fuel adjustment component (FAC)-linked revision scheme will be effected on passenger fares, taking the upper revision of fares to 14.2 per cent, an official said.
The Railways had earlier issued a notification on May 16 effecting hike in passenger fare by 14.2 per cent across the board and freight charges by 6.5 per cent from May 20. This was followed up with an official press release.
The May 16 fare hike decision, which had raised eyebrows as it came in the midst of Lok Sabha election results, led to a scurry of activities in Rail Bhawan on that day and the Railway Board went into a huddle to discuss its fallout.
Soon after, the red-faced Railway Ministry had put the decision on hold, saying the matter related to the revision will be left to the next government.
The then Railway Minister Mallikarjun Kharge came out with a statement directing the Board to leave the decision on the hike to the new government.
“It is now informed that under the directions of the Minister of Railways Mallikarjun Kharge, the decision on the proposed hike in the freight charges and passenger fares have been kept pended till further advice for placing this proposal before the new government,” the statement said.
A fresh notification was issued later, stating that the “revision of fares with effect from May 20 should be suspended till further advice.” –PTI
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