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Rediff News  All News  » Business » Rail fares may be hiked soon

Rail fares may be hiked soon

October 03, 2013 15:24 IST

A proposal to increase rail fare is under examination and a decision will be taken shortly, Railway Minister Mallikarjun Kharge said on Thursday.

"Fuel adjustment component (FAC) was announced in the budget and as per the 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," Kharge said.

To repeated queries whether there will be a FAC-linked revision in passenger and freight tariff in near future to reduce the losses in passenger segment, Kharge did not rule out the possibility of any increase and only said, "I am examining it. As soon as we arrive at some conclusions, then we will decide on it."

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

According to the calculation, railways will have to bear a burden of Rs 1,200 crore (Rs 12 billion) 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 (Rs 260 billion) 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 (Rs 8.5 billion) 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. 

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