After a decade of a "no fare hike regime" under a coalition government at the Center, train fares are finally set to increase to save the mode of public transportation from virtual bankruptcy.
"We have to ensure that the vast infrastructure of the railways does not collapse and stop functioning. So, we have to increase fares and assure the public that if there is any hike, the public will also appreciate it because we are going to improve services," said new railways minister Pawan Kumar Bansal, shortly after taking charge.
Rail fares were last hiked in 2002 during Nitish Kumar's tenure.
Former railways ministers Mamata Banerjee and Lalu Prasad Yadav did not raise fares and both were accused of using the portfolio to promote regional political interests in their states.
Banerjee even forced a rollback of a hike proposal announced by her nominee Dinesh Trivedi earlier this year. That decision is estimated to have deprived the railways of Rs. 4,000 crore.
Railway minister Pawan Bansal and his deputy Adhir Ranjan Choudhary are seen at the railway ministry in New Delhi.
Yadav had even nominally cut passenger railway fares by Rs. 1.
Because of the "no fare hike" policy, loss to the railways is estimated to be nearly Rs. 24,000 crore, officials said.
"Populist policies of previous railways ministers are ruining rail finances," said Shiva Gopal Mishra of All India Railwaymen's Federation (AIRF).
"We are not in the least bit opposed to hiking passenger fares," Mishra added.
With the Congress assuming control of the railways portfolio, hopes have revived that big-ticket projects, including the Dedicated Freight Corridor (DFC) plan, will get a push.
"All regions of the country will get their due from the railways," Bansal said.
"The new minister is a Congressman and represents a Union Territory. He is unlikely to get swayed by regional political interests," an official said.
In 2007-08, the losses on account of passenger fares amounted to Rs. 7,067.67 crore. The figure rose to Rs. 13,901.22 crore in 2008-09; Rs. 18,760.67 crore in 2009-10; Rs. 20,948 crore in 2010-11; and Rs. 24,000 crore in 2011-12.
"It will be my endeavour to improve the physical and financial position of the railways. We have to move with the times," Bansal said.