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CAG effect: Railways may hike AC fares

Comptroller and Auditor General has recommended Railways of rationalisation of freight and passenger tariffs.



New Delhi: Railways is mulling a relook into the passenger fares of AC classes in wake of the Comptroller and Auditor General recommendation of rationalisation of freight and passenger tariffs to improve its finances.

Giving an indication to this effect, Railway Minister Dinesh Trivedi said that "whatever has been observed in the CAG report, it will be taken into consideration”.

He, however, said, "It (revision of fares) would be thought of without affecting the general class which is used by poor people whose affordability has to be taken into consideration”.

The minister also made it clear "whatever the policy matter (increasing fares), as and when, it will be brought to Parliament first."

Passenger fares in any class have not been revised for over eight years despite persistent demands from the Planning Commission and other quarters.

Most recently, Railways` unions had favoured a revision of fares keeping the PSUs poor financial condition in mind.

The CAG report on Railways for 2010-11 tabled in Parliament last Friday had suggested that "the way forward for railways to improve its finances is to rationalise both freight and passenger tariffs”.

It said the rationalising has to be thought of through some form of "pre-determined non-discretionary inflation indexing."It noted that Railways was unable to meet its operational cost of passenger services and other coaching services, with the result that in 2008-09 loss on operation of passenger and other coaching services stood at Rs 15,268.41 crore. The loss in the previous fiscal was Rs 7,493.50 crore.”

All category of passenger services except AC chair car and AC three tier incurred losses in 2009-10, the report said. The CAG report further said net revenue surplus of the railways declined from Rs 13,431 crore in 2007-08 to Rs 75 lakh in 2009-10. Depreciation reserve fund, development fund and pension fund closed in 2009-10 with negligible balances of Rs 4.98 crore, Rs 5.41 crore and Rs 1.24 crore respectively.

Operating ratio (percentage of working expenses to traffic earnings) deteriorated to 95.28 percent in 2009-10 from 90.46 percent achieved in 2008-09.

Out of 16 zonal railways, eight general railways had operating ratio of more than 100 percent, implying that there working expenditure was more than the traffic earnings, it said.

With general classes receiving the maximum patronage for railways, the minister said improvement of amenities in such classes will also be a focus area for them.

"There is a need for look after the improvement in amenities of the general class."

PTI

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