Even as the ministry of finance and the Planning Commission are of the opinion that railways needs to review passenger fares, which have not been revised upwards for a decade now, railway minister Mamata Banerjee is likely to stick to her populist stand by refusing to hike fares when presenting the railway budget weeks before the elections in West Bengal.
Ministry officials contend that the passenger fares may not be increased even though the railways is facing a severe cash cruch, with its reserves touching a low of Rs5,000 crore, down from Rs18,000 crore in 2007-08. Officials feel that the central government needs to chip in with fiscal stimulation to the railways.
“With the kind of the social responsibility that the railways have to take care of, the government needs to provide us the fiscal stimulus to sustain our infrastructure growth,” said a ministry official.
The railways suffer an annual loss of Rs14,000 crore on account of passenger operations. The Planning Commission recently asked the railways to work on its colossal losses from passenger operations, which have to be subsequently subsidised through freight earnings. The finance ministry has also indicted the railways, saying it cannot be seen only giving them aid. A railway convention committee report tabled in parliament has cited the finance ministry saying, “Railways need to have certain discipline.”
The difficulty is that most railway ministers believe that jacking up fares hardly increases revenue while it creates a political disadvantage.
On other passenger-related facilities, the official said we have already sought proposals from various directorates. “Some out-of-the-box thinking will be there on the passenger avenue front. The ministry, this time around, is likely to be very innovative in announcing passenger facilities,” the official said, but refused to give details.
