Could there be another hike in railway fares?

Another hike in rail fares is on the cards, with the railways planning to reduce passenger subsidy and a sizable cut in myriad concessions given to various categories of passengers.

In the wake of merger of railway budget with the general budget, the rail ministry had urged the finance ministry to bear its operational losses but the request was turned down by the latter. Citing its inability to bear the loss of Rs 33,000 crore, the railways has told the finance ministry that it is left with no option but to cut down the concessions.

A senior official of the rail ministry's finance department said it could consider cutting down expenses on concessions and subsidy that will ultimately result in fare hike. At present, railways spends nearly Rs77,000 crore on passenger operations while it receives only Rs 44,000 crore from passenger fares.

Thus it incurs a loss of Rs 33,000 crore annually. However, the finance ministry is not keen on providing any financial assistance and instead wants the railways to bridge the gap through its internal resources. A railway board official said the ministry was also considering generating money through commercial exploitation of itsvacant land and station buildings, but that would require huge investment.

"The railway ministry has no option but to cut down its expenses on concessions and subsidy. This may result in hike in fares and monthly season tickets," the official said. In the last budget, the railway minister had speared a fare hike but increased the freight charges by up to 10 per cent to mop up additional Rs4,000 crore.

The move assumes significance in wake of the railways' huge expenditure on subsidy and concessions. Railways provides concession in rail fares to 53 categories. The account book of the rail ministry shows that the railways offers 43 per cent subsidy on a single train journey to its passengers. This means, if the railways spends Rs 100 on a train journey, it only charges Rs 57 from passengers and the remaining Rs 43 goes as subsidy.

Comprehensive data shows that the railways incurred the expenditure of Rs 34,000 crore on 'social service obligation' for the year 2015-2016. Out of this, Rs 1,600 crore was spent on a myriad concessions on train travels. A major chunk of it - Rs 1,200 crore - was spent on concession to senior citizens.

As per the rules, male senior citizens above 60 years of age are given 40 per cent concession of rail fare while women above the age of 58 years can avail 50 per cent concession in all classes. Some categories like physically challenged, deaf and dumb, and heart patients can avail concession up to 75 per cent on rail fares.