Title - Rlys set to hike fares to fund upgrade

New Delhi: An all-round passenger fare hike seems to be imminent, with the railways appearing to be ready to bite the bullet to come out of the funds crunch that has affected its operations and is threatening to cripple its modernization and expansion plans.
    A clear indication that the railways may have come around to treading the unpopular path to stave off bankruptcy came from railway minister Pawan Kumar Bansal. The minister asserted that people were ready to pay more for better and modernized services. “People are ready to pay. After all, we
have to modernize the railways,” Bansal told TOI.
    He said cross-subsidization—a scheme where the railways charges higher freight rates to keep the passenger fares low—had become unviable and the railways could persist with it only at the cost of pricing itself out of the goods transportation business. Bansal: Fare hike will hurt, but rlys must be realistic
New Delhi: Railway minister P K Bansal has told TOI that passenger fares were set for a hike as cross-subsidization had become unviable. He said besides other things, cross-subsidization, which has seen the railways steadily losing market share to road transporters, would result in clogged roads, higher transport cost for goods and higher pollution.
    “People also must understand this. We seek their cooperation since there has been no increase in passenger fares for 12 years. Though any increase in fare will pinch, we have to be realistic in our approach,” Bansal said in a significant policy pitch weeks before he presents the last full rail budget under the UPA-II.
    He said he had sensed that people were ready to pay more. “Wherever I have gone in these two months and whatever interactions I have had with people, with representatives of the people, with the press…everybody has supported an increase in fares. Everybody says it’s time for a hike. We have to provide better services than what we are giving presently, augment our capacity,” he said.
    In the last railway budget, the government hiked fares only to roll them back, except for AC-1 and II passengers. The last across-theboard hike had taken place at the start of the millennium, when Nitish Kumar held the railways portfolio. His successors fought shy of taking the “politically incorrect” step. However, Bansal said the railways may have run out of soft options now. He said the implementation of the 6th Pay Commission staggered over five years left the department, which is the government’s largest, with an additional wage bill of Rs 73,000 crore—almost three quarters of its gross traffic earnings for the last fiscal.
    Stressing that railways could not go on hiking freight rates, Bansal said the pattern of goods transportation in India was heavily at odds with what was the case in China and the US, where trains continue to be the main beast of burden.