NEW DELHI: By announcing a hike in passenger fares in paise per kilometre across the board, Railway Minister Dinesh Trivedi is hoping to net Rs 4,000 crore in revenue for 2012-13. Trivedi has cushioned the Railways from losses due to stagnant fares in future by introducing the fuel adjustment component and a clear statement of passing all new input costs to passengers, if they arise.
The Railway Board has made it clear that earnings from freight traffic cannot subsidise passenger fares forever. “If this continues, then I am afraid Railways may lose freight traffic to road,” Trivedi said.
Trivedi’s logic of rounding off fares to multiples of fives apart from affecting the fare hike will also result in considerable revenue. So, while Rs 11 and Rs 16 will become Rs 10 and Rs 15 respectively, Rs 12, 13 and 14 will become Rs 15 and Rs 17, 18 and 19 will become Rs 20. This rounding off is for suburban fares.
For mail and express trains, fares will be rounded off to the next higher multiple of Rs 5. So, even if your fare is Rs 61 for a particular journey, you will pay Rs 65 under the new plan. This rounding off will help the Railways generate more revenue than from the proposed hike of paise/km. Essentially, a Chennai-Bangalore train that covers 361 km was charging Rs 430 for AC 3-tier. This will now become Rs 470. At 10p/km hike for AC 3-tier the increase is Rs 36. So instead of charging Rs 430+36 = 466, railways will be charging Rs 470.
Saying that the hike doesn’t cover the impact of fuel price hike in the last eight years, Trivedi said he was not burdening the passenger with the increase in staff cost. With the fuel component, Trivedi has adapted the calculations that airlines do by passing fuel surcharge to passengers.