Bansal signals reform, raises railway fares
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Passenger trains, which carry an estimated 2.3 crore people every day, have been causing the Railways a loss of 18 per cent annually. Accumulated losses by the end of this financial year are likely to be around Rs 25,000 crore. Non-AC fares are more unviable than AC fares.
"This (fare increase) was needed because the people of this country wanted better service in Railways. People are willing to pay for it. That would not have happened without revising fares immediately," Bansal said. "Cross subsidisation from freight business is no more viable because of fast-evolving competition from other modes."
Fares of the Kolkata Metro have not been affected by Wednesday's increases, but a revision is indicated shortly. The Metro in Mamata Banerjee's base has been causing an annual loss of around Rs 300 crore to the Railways.
Wednesday's announcement comes two days after Bansal met Planning Commission Deputy Chairman Montek Singh Ahluwalia to discuss Railway finances. The plan panel has been asking for higher fares for several years.
With the fare hikes out of the way, the railway budget would concentrate on announcing a handful of new projects and trains, sources said.