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Indian Railways is planning to implement fuel adjustment component (FAC) on both passenger and freight segments, further pushing up fares. The move comes close on the heels of a sharp 15% hike in freight tariff levied as busy season charges.
ďAs per the budget proposal, FAC should have been implemented from October 1. A decision will be taken shortly,Ē railway minister Mallikarjun Kharge said on Thursday. He did not rule out the possibility of an increase.
According to the budget proposal, the fuel component is segregated from tariff as FAC. Railways is expected to revise passenger and freight tariff every six months.
According to the calculation, railways will have to bear a burden of Rs 1,200 crore due to increased energy and input cost in the next six month. The cross-subsidy for passenger service is currently touching Rs 26,000 crore in a year.
The then Railway Minister Pawan Kumar Bansal had announced the implementation of FAC-linked revision in only freight tariff from April 1. As regards to passenger fare, since it was revised only in January this year, it was not touched then.
Railways had decided not to pass the additional burden of Rs 850 crore because of the fuel hike to the passengers and absorbed it then.
Railways has imposed 15 per cent levy as the busy season charge on all commodities from October 1.