Railways fare hike for passengers, freight coming, Mallikarjun Kharge hint turns into action

Written by PTI | New Delhi | Updated: Oct 5 2013, 03:53am hrs
Indian RailwaysRailways is expected to mop up about Rs 1250 crores from the hike in the last six months of the current fiscal. Reuters
Railways have decided to increase passenger fares and freight tariff by about 2 per cent from next week to offset the financial burden arising out of increased input cost. Railways Minister Mallikarjun Kharge had indicted this earlier.

Railways expected to mop up about Rs 1250 crores from the hike in the last six months of the current fiscal, sources in the ministry said.

The suburban and non-surban fares would, however, remain untouched.

The decision on the fresh round of hike has been taken under the system of fuel adjustment component (FAC) about which an announcement was made in the 2011-12 rail budget.

Railways has taken into account the additional burden of 7.3 per cent increase in diesel price and about 15 per cent in electricity hike.

While the fare of AC and sleeper class will be increased by about 2 per cent, the freight rate will go up by 1.7 per cent, as per the decision.

Railways has imposed 15 per cent levy as the busy season charge on all commodities from October 1 and the FAC-linked revision is likely to take effect from October 10.

According to the budget proposal, the fuel component is segregated from tariff as FAC and the railways is expected to revise the passenger and freight tariff after every six months taking into account the input cost and the prevailing market condition.

According to the calculation, railways will have to bear a burden of Rs 1,250 crore due to increased energy and input cost in the next six months. The cross-subsidy for passenger service is currently touching Rs 26,000 crore in a year.

Mallikarjun Kharge had said yesterday that "fuel adjustment component (FAC) was announced in the budget and as per the budget proposal it should have been implemented from October 1. The file containing the FAC proposal has come to me and I am examining it and a decision will be taken shortly."

The then Railway Minister Pawan Kumar Bansal had announced the implementation of FAC-linked revision in only freight tariff from April 1. As regards passenger fare, since it was revised in January this year, so it was not touched then.