Hike in rail passenger fares may be coming soon as Railways plans authority to rationalise fares

New Delhi: Come 2017, you could be paying more for your train travells, as the Railways Ministry is soon going to have a rail tariff authority which is expected to recommend reforms in bringing down Rs 33,000 crore losses per year in passenger fare subsidies, which includes hiking passenger and freight rates.

The railways had last hiked fares of both passenger fares at 14.2 percent and freight at 6.5 percent in 2014.

The earlier hike in 2013 had to be rolled back due to public pressure. As a matter of fact, in a populist measure, rail fares were reduced twice during the UPA's two-time tenure at the Centre.

The Economic Times reported that the railway ministry will soon seek Cabinet approval for setting up an independent agency to recommend passenger and freight fares, a move that could depoliticise the thorny matter of revising rates. 

The paper noted that the original proposal to set up a regulator that decides fares has for now been diluted to an authority that only recommends their revision. “Through this route we won’t require parliamentary approval and a regulator could be set up without any delay through the Cabinet clearance,” the official said.

According to a top official, the proposal will be sent to the Cabinet this week and approval could come as early as next week. Once approved, this will count as the second most important step, after the merger of the rail budget with the Union Budget, toward reforming the the national transporter that’s been losing Rs 33,000 crore every year in passenger fare subsidies. 

The proposed Railway Development Authority of India will consist of a chairman and four members independent of the railways. The ministry has already received comments from various ministries and the Niti Aayog. 

“The proposed authority would be free to recommend fares and freight rates. It would rationalise the entire fare structure for the railways. It would be a big transformational change for the organisation. We will keep rationalising fare as per the market demand,” Prabhu had recently told the paper.