Thaindian News

New Delhi, Oct 19 (IANS) Hinting at a possible revision of passenger fares, Railways Minister Dinesh Trivedi Wednesday said the railways are “working out a way to meet their financial constraints and social obligations”.

The minister said “dynamic pricing to charge those who can afford to pay” while protecting the bulk of the passengers “who belong to the lower strata of society” is the need of the hour.

“We need intelligent thinking on the issue, and we are applying our mind on all possible options,” Trivedi said at the Economic Editors’ Conference here.

“We don’t want to go the Air India way,” he said adding “an across the board fare hike will hurt the interest of the bulk of passengers”.

Indian Railways, the largest rail network in the world under single management that runs 10,500 trains and ferries 2.2 crore passengers every day, last hiked passenger fares in 2002-03.

As part of fare rationalisation in 2002-03, minimum fare for second class mail and express trains went up by Re.1 from Rs.15 to Rs.16. For long distance trains up to 341 km, the hike ranged from Rs.1 to Rs.6.

Trivedi said demand for revision of passenger fares has come not only from the Planning Commission and the parliamentary consultative committee on railways, but from railway unions as well.

Sources said the need to revise fares has arisen owing to the financial constraints of the Indian Railways and a fear among the unions that the staff may not get their salaries.

But upgrading passenger services too is a concern within the railways.

“We need to generate funds for passenger services. We are dependent on budgetary support and loans from the market,” said Railway Board chairman Vinay Mittal.

Sources said the “investible surplus” of Rs.13,000 crore this year is expected to drop to Rs.4,000 crore after the government revised its economic growth target from 8 percent to 7.5 percent.

Plus there has been a recent increase in the railways’ fuel bill, including diesel and electricity cost, which is around 18-20 percent of its annual expenditure.

An inflated fuel bill would mean the planned railway expenditure of Rs.73,000 crore for 2011-12 would go up to Rs.78,000 crore by the end of the financial year, said sources.

Talking about the future plans of the railways, Trivedi said the ministry is also planning to set up a separate authority to explore running of high speed trains and another one to generate revenue from railway stations.