"We are considering a partial relaxation in the quantum of increase, but will go ahead with the hike. This will become effective from December 1," Bansal told a news conference here.
The move is being seen as a desperate measure to prevent rail finances from sliding down. Asked about the fare hike proposal, Bansal, however, said this "would have to wait".
After having repeatedly asserted in past weeks that it was imperative to raise fares to shore up the rail finances, Bansal said on Wednesday that "there is a need to do something about it (fare hike). But there are many reasons for not being able to do it."
He said the railways were working on setting up a rail tariff authority which would suggest the quantum of fare hike after taking into consideration all operational costs like existing diesel and power rates.
Indicating that setting up of the regulatory body would take time, he said the cabinet approval would be followed by inter-ministerial discussions.
Asked if the timing of the fare hike was linked to the setting up of a regulatory authority, Bansal replied in the negative.
"Ahead of Gujarat polls, it would have been imprudent to hike fares. Also, the UPA took hard decisions in hiking prices of petrol, diesel and LPG. Therefore, the decision to put off hike in fares," said an official.