Railway Budget 2012: Passenger fares hiked. More to come?

Well, he finally bit the bullet. Union Railway Minister Dinesh Trivedi announced a modest hike in passenger fares in the Railway Budget for 2012-13. It is the first hike in passenger fares in eight years. The minister hiked the fares for suburban and second-class passengers by 2 paise per kilometre, while fares for sleeper class were hiked by 5 paise per kilometre. Fares for mail express second class passengers are set to rise by 3 paise per kilometre. [caption id=“attachment_244080” align=“alignleft” width=“380” caption=“Dinesh Trivedi. AFP”]  [/caption] Fares for AC chair car, AC 3 Tier and first class passengers were hiked by 10 paise per kilometre, while fares for AC 2 Tier went up by 15 paise. AC First Class passengers will have to shell out 30 paise more per kilometre. The minimum fare and price of platform tickets were also raised to Rs 5. Fares would also henceforth be rounded off to the next nearest Rs 5 to prevent the problem of giving and recieving loose change at ticket windows, Trivedi said. The minister said the revisions would have “marginal impact” on fares, adding that he had desisted from announcing any steep increase in fares. “For suburban second-class passengers travelling 35 kilometres, the hike will be on Rs 2,” the Budget document said. The Minister also proposed appointing a body of experts consisting of passengers, trade and industry bodies and public representatives to examine the issue of setting up an independent Railway Tariff Regulatory Authority to decide the fares of both freight and traffic. He also warned that currently the earnings from freight traffic were subsidising passenger fare earnings. “This model of heavy subsidy is not sustainable over a long period,” Trivedi said in his speech. “If this continues, then I am afraid Railways may lose freight traffic to road.” In addition, the minister said that a fare system to incorporate fuel price hikes is also under consideration. “I wish to share with the august House that I am contemplating a system of segregating fuel component in the cost associated with passenger services and call it FAC (fuel adjustment component). “The FAC will be dynamic in nature and will change in either direction with the change of fuel cost. I must also be forthright and take the House into confidence in mentioning that in the event of any further increase in input costs of railways, it will not be possible for us to keep the passengers cushioned from the impact of such increases,” he said. Despite the grim warning, he managed to grant some relief to certain categories of passengers. He announced a 50 percent concession in fares in AC-2, AC-3, chair car and sleeper class tickets for patients suffering from ‘aplastic anaemia’ and ‘sickle cell anaemia’ and extended the facility of travel by Rajdhani and Shatabdi trains to Arjuna awardees. Given the introduction of new trains and services, the minister estimated passenger traffic growth at 5.4 percent for the year ending March 2013. For access to the Railway Budget document, click here.