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Indian Railways has decided to increase passenger fares of all mail and express trains by 2% and freight tariff by 1.7% across the board. The increased fares in the passenger segment would be effective from October 7 and revised freight charges from October 10.
To soften the blow of the passenger fare hike on daily travellers, the railways has spared the general class of suburban and passenger trains from any increase in rates. The hike will also not be applicable on monthly pass holders of general classes.
This is the second increase in passenger fares this year after a 20% hike in January. Just a week ago, the railways had also raised freight charges by 15% on all commodities, under busy season charges.
The fresh revision has come in the form of fuel adjustment component (FAC) which was announced in the last rail budget to adjust the fluctuating prices of fuel.
“In the last budget it was announced that FAC would be revised every six months. So, the new revision has been done accordingly to offset the increased fuel prices,” a railway board official said.
With the hike in passenger rates, the first class fare of Delhi-Mumbai Rajdhani Express will go up by R80 while the freight charges of coal will go up by R14 per tonne.
According to the calculation, the railways will have to bear a burden of R1,200 crore due to increased energy and input costs in the next six month. The revised passenger fares will get railways an extra revenue of R420 crore in the remaining months of this fiscal whereas the railways is expected to earn R790 crore from increased freight tariffs. The FAC was implemented for the first time in April this year.
At present, the total fuel bill of the Indian Railways is around R21,000 crore, of which R8,500 crore is the power bill and the rest is diesel bill. “The motive of FAC is not to earn any profit but to offset the increasing burden of fuel prices,” the official added.