Saturday, September 3, 2011

Hint of rail fare hike
New Delhi, Sept. 2: The loss-making railways appear to be gearing to raise passenger fares after nearly 10 years, under pressure from the Planning Commission and other quarters.
The railways plan to hike AC II and AC I fares and also adopt a fuel adjustment component that could lead to a passenger fare rise across the board, said sources close to minister Dinesh Trivedi.
Rail Bhavan sources said the final decision might take some time. “No decision has been taken yet. The process, however, has started at the mental level,” a source said.
Adoption of the fuel adjustment component (FAC) means raising or reducing passenger and freight rates in tandem with an increase or decrease in domestic diesel prices. This is similar to the government’s deregulation of petrol prices. A detailed FAC formula is being worked out.
A source said the proposed hike was a result of nudging from the Planning Commission. Railway finances are in the red and the plan panel is learnt to have said the ministry had no choice but to hike fares.
Planning Commission deputy chairperson Montek Singh Ahluwalia is said to have underlined this to Trivedi at a recent meeting.
The comptroller and auditor general’s report for the year ended March 2010 too has painted a grim picture of railway finances and recommended “rationalisation of freight and passenger tariff”.
The two previous railway ministers, Lalu Prasad and Mamata Banerjee, had adopted a populist stance and refrained from hiking fares.
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