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After the recent hike in freight rates by six per cent, upper class train journey may also become costly with the Railways finalising plan to rationalise passenger fares to tide over its financial problems.
“We are trying to see how we can do some rationalisation of passenger fares...That process is on,” Railway Finance Commissioner, Ms Pompa Babbar, told PTI.
However, Ms Babbar hastened to add, “We are trying to see how not to burden the poor people and how not going for massive hike, perhaps something here and there.”
Asked whether the proposed hike has to wait for the coming Rail Budget or it may take place even before that, she said, “It is possible anytime.”
Pressed further on the issue, she said, “When we withdraw money from the consolidated fund of India, we need to go to Parliament for withdrawal of the fund. But for passenger hike, we need not go to Parliament. We do not need any approval for it (fare hike) from Parliament.”
The Railways’ move comes against the backdrop of suggestions from the Planning Commission that a revision has not been touched for over eight years now.
To a question as how economically viable for Railways is not to raise fares for so many years, she said, “Every organisation has a system of cross—subsidisation. But only taking passenger (fare hike) side, it will be taking a lopsided view of railway working.”
Reeling under financial crunch, Railways may give a relook at its plan size to ease out pressure on surplus fund.
“We may also relook at our plan size meant for expenditure in infrastructure and other development work,” Ms Babbar said.
Plan size of Railways is pegged at Rs 57,000 crore.
“It is (Rs 57,000 crore) likely to decrease as it will help easing out the pressure on generating surpluses,” she said, adding “it is at discussion stage“.
The Railways is having minus balances in the capital and development fund, and seeking a bridge loan of Rs 2,100 crore from the Finance Ministry to meet the expenses on development works.
“We are having minus balances in capital fund and development fund from last year so we needed a bridge loan for this,” she said, adding “This is actually for the last year. I had a discussion with the Finance Secretary and he has to take approval from Finance Minister. It has also been discussed between the two ministers (Pranab Mukherjee and Dinesh Trivedi). Let us hope that a positive thing will come out.”
Development fund goes for passenger amenities, staff amenities, and traffic facilities; while the capital fund is for leasing purposes that is Indian Railway Finance Corporation payments. “For servicing of those lease charges we need capital fund,” she said.
Whether the bridge loan will be sufficient, Ms Babbar said, “We do not want to fall into the debt trap by taking many loans. Because more loans means more re—payments. However, we are taking loans for our projects like Dedicated Freight Corridor are taking Japanese loan for its Western corridor and for Eastern corridor we are taking loans from World Bank.”
About meeting the target of 91.1 per cent operating ratio in the current fiscal, she said, “As of now I do not think we will achieve the target but we are taking a lot of pre—emptive actions to curb expenditure in plan and non—plan areas.”
“However, we will keep trying; we still have six months left. So I hope there may be some improvement”.
Source - The Hindu Businessline