Another rail fare hike likely by month-end

The across-the-board hike in rail fares announced in January may have been the first such move in 10 years, but the next hike will not take so long.

There is a plan to increase AC 3-tier, chair car and sleeper class fares — that account for 50% of the revenues generated from passenger fares — and railway minister Pawan Kumar Bansal is likely to make the announcement in his budget speech later this month.

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.


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