New Delhi: With Railways facing financial crunch, Railway Minister Pawan Kumar Bansal on Wednesday said "something needs to be done" on passenger fare, indicating his inclination to raise it, and advocated delinking the issue from politics.

However, he shied away from giving a time frame for hiking passenger fares-- an area where ministers have broached cautiously over the last eight years as it is linked to populist sentiments.

"...There is a need to do something about it (fare hike). But there are many reasons for not being able to do it. There is a need for depoliticisation of fare hike proposals," the minister told reporters.

He said "physical and financial condition of railways should be good. Though railway revenue is being increased but cross subsidisation for passengers’ fares is very high.

"The ratio of passenger fare to freight is .3 to 1 in India. In China it is 1.3 to 1. So you can imagine how our passenger fare is less." The cross-subsidisation for passenger fares has touched about Rs 24,000 crore in the current fiscal, while many rail projects are facing fund crunch.

Bansal said railways is working on setting up a rail tariff authority which will suggest the quantum of passenger fare hike after taking into consideration all operational costs like existing diesel and power rates.         

"We are working on for setting up a the rail tariff authority (RTA). Discussions are going on." However, he said, "it is a long process. First we will form an opinion and then there will be inter-ministerial notes then it will go to Cabinet for approval."

Asked whether he will wait for the formation of RTA for declaring hike in passenger fares, Bansal said, "No, it (RTA) is a long process. Fare hike proposal can be considered independently."

Rail fare hike soon

To a question about how soon a fare hike can come and what is preventing him from implementing it, he said, "You have to wait to see how soon it is. I am looking into it and when a decision will be taken it will be a considered decision."

Asked whether he is ruling out fare hike at the moment he said, "No, I am not ruling out but at the same time fare hike is one small component of the total amount of money required for modernisation and infrastructure development."

Fare for AC Ist and AC 2nd class were raised in the last budget though the others were left untouched. Bansal said the focus of railways is on safety and, modernisation of infrastructure. "Induction of modern technology to prevent accidents particularly the collision of trains is a top priority," he said.

Listing his other priorities, the minister said, "We are also working for the augmentation of capacity by electric and diesel locomotives and high capacity wagons through joint venture and PPP initiatives."

On private investment, he said "We are encouraging private investment in rail connectivity project particularly to coal and mining areas. We are trying different revenue models bringing different forms of PPP also besides extra borrowings from market also."

On dedicated Freight Corridor (DFC), he said "our aim is timely completion of DFC. The DFC would untangle the rail network for faster movement of a passenger trains. We will try to complete it in the next five years."      

Referring to high speed rail corridors, he said seven routes have been identified for high speed rail network. "This is a cost intensive project and we have to see how resources can be mobilised."

He said the 534 km long Mumbai-Ahmedabad high speed rail corridor route will be taken up first. It is estimated to cost about Rs 63,000 crore. Referring to passenger amenities, Bansal said "cleanliness and food served in rail premises will be also our top priority."

Highlighting the importance of railways, he said it should be the growth engine for economy with its wide network. "It has the potential of fuelling the growth of GDP by 2 points," the minister said.


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