The last hike was projected to fetch revenues worth Rs. 6,600 crore for the railways, but the benefits were largely offset by the government’s subsequent decision to increase diesel prices.
The diesel hike has adversely impacted railway operations by an estimated Rs. 3,300 crore.
Following the hike, the railways operating ratio (OR) for 2012-13, which is the money spent to earn R100, is now pegged at 89%. This is the first time in four years that the OR has gone below 90%.
“If fares are not immediately hiked, the OR will shoot up again and could touch 93% in the next fiscal,” an official said.
The railway minister is likely to take the final call after the annual general managers’ meet on February 15. He is also working out a rationalisation scheme on projects sanctioned by past railway ministers. According to plans being worked out, projects that have a higher rate of return, are socially desirable and nearing completion will get priority.