Pursuing a "reformist" agenda, railways minister Dinesh Trivedi sparked off a controversy within the Trinamool Congress and marked a big departure from the UPA tradition by announcing an up to 20% hike in passenger fares during his maiden budget speech in the Lok Sabha on Wednesday.
Trivedi's predecessors - Lalu Prasad and Mamata Banerjee - maintained a "no-fare hike" regime, even as the Planning Commission and finance ministry pressed for a hike.
Trivedi has proposed a hike ranging from 2 paisa per km to 30 paisa per km across various categories of train travel: Two paisa per km for suburban and ordinary second class, 3 paisa per km for mail/express second class and 5 paisa per km for sleeper class and 10 paisa per km for AC chair car.
AC-3 tier, first class and AC-2 tier will cost more by 15 paisa per km, while AC-1 will be dearer by 30 paisa per km. Though the raise appears marginal, the increase will be to the tune of Rs 40 for a passenger traveling by sleeper class in mail/express trains for a distance of 750 km.
The fare hike will be Rs 57 for AC-3 tier passenger travelling 530 km, and for those travelling the same distance by AC-2 tier and AC-1 tier, the hike will be Rs 84 and Rs 163 respectively.
For non-suburban second class ordinary passenger travelling a distance of 35 km, the hike will be R4, and for second class mail/express passengers travelling a distance of 375 km, the increase will be R12.
The passenger fare hike will help the Railways generate about Rs 7,000 crore annually, Railway Board chairman Vinay Mittal said. The Railways have been suffering an annual loss of around Rs 20,000 crore, he added.
Trivedi has also proposed the setting up of a tariff regulatory authority to determine freight and passenger rates.
While PM Manmohan Singh called the budget a "forward-looking" one, Opposition parties, including the BJP and Left, dubbed it as "anti-poor".
India Inc described the budget as "balanced" and focused on passenger safety and modernisation. "It is a balancing act by the minister. It is a good decision to look at the fare as it has not been increased in the last several years," CII director general Chandrajeet Banerjee said.