"The hike in both passenger fare and freight rate is inevitable as the financial position of Railways is not so good. However, the quantum of hike is yet to be finalized," a senior Railway Ministry official said.

When asked whether the hike will be announced in the Rail Budget, the official said, "One cannot rule out its possibility. But at the same time it is not necessary to announce the hike in the budget only. It could happen before or after the budget also."

The UPA government had left passenger fares unchanged in the Interim Railway Budget in February.

Earlier on May 16, the Indian Railways had announced hike in both passenger fares and freight rates by 14.2 percent and 6.5 percent respectively with effect from from May 20.

However, the hike notification was put on hold later in the day leaving the decision to the next Minister for Railways.

The Indian Railway was aiming to garner Rs 8,000 crores through the increase in passenger and freight charges last month.

Currently, it is facing severe financial crunch with passenger subsidy touching Rs 26,000 crores.

Shortage of financial resources is a key constraint to Railways following the desired path, said the official.

“The focus of the Rail Budget will be on safety, security and service,” the official added.


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