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Jul 13, 2017 04:17 PM IST | Source: Moneycontrol.com

Train travel may soon become costlier as Railways get nod for ‘creeping’ fare increase

“Implement creeping increase in passenger fares’, said one of the pointers, in a dictate issued by the Prime Minister’s office. The passenger’s segment which is very subsidized will see a tiptoeing hike in the tariff from September.

Train travel may soon become costlier as Railways get nod for ‘creeping’ fare increase

The government has finally given its approval for an increase in railway fares, and it may be implemented later this year. This means the currently subsidised passenger fares could inch higher starting September.

The decision was taken after Prime Minister chaired a meeting of the infrastructure ministries in April this year where the condition of the railways was reviewed.

Among actionable points suggested by the PM's office was to “Implement creeping increase in passenger fares," according to a report in the indian Express.

Sources told the Sunday Express the government was planning a “smart play” on the matter. This involved progressive incremental revision that does not immediately pinch the passengers pockets. Hence, the term “creeping increase”.

Currently, the Railways recover only 57 percent of the cost in passenger services and 37 percent in suburban train services. Only AC-three tier is profitable, but even that is nullified by the losses in other departments. The service obligation, excluding staff payments and law and order, totals to about Rs 24,000 crores.

On the freight side, too, things have been stagnant through FY17. This is despite measures such as the launch of 'timetabled’ freight trains, waiver of port congestion charges and double-tariff policy for iron ore to boost loading and freight revenue.

Now, three-year freight contracts will also be provided for fixed rates for the contract period, according to official sources. Some long-term freight contracts would be signed on Thursday.
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