Railway price hike - Some facts

The fare increase, class-wise, is as per the following table:
           
S No.
Class of Travel
Proposed per km increase in fares
i.
Second Class Ordinary
(Suburban)
2 Paise
ii.
Second Class Ordinary
(Non-Suburban)
3 Paise
iii.
Second Class
(Mail / Express)
4 Paise
iv.
Sleeper Class
6 Paise
v.
AC Chair Car
10 Paise
vi.
AC 3-Tier
10 Paise
vii
First Class
03 Paise* [13p]
viii.
AC2-Tier
06 Paise* [21p]
ix.
AC First Class
10 Paise*
[40p]





















* In addition to increase of 10 paise per km in case of First Class, 15 paise per km in case of AC 2Tier and 30 paise per km in case of AC First / Executive Class already implemented w.e.f. 01-04-12. i.e as per last year Railway budget

 
Rationale for rail hike:
  • Basic fares had not been revised upwards in the  last ten years 
  • Losses in passenger segment which were Rs.6159 Cr in 2004-05 had risen to Rs.19964 Cr in 2010-11 (18% per annum) and  is expected to increase to Rs.25000 Cr in 2012-13.
  • Railway’s Input costs have increased by 10.6% per annum between 2004-05 and 2010-11, whereas fares stagnated or were reduced in Lower Classes aggravating passenger losses.   
  • cross subsidy through freight business is  no more viable in view of fast evolving competition from other modes.
  • Internal resource generation was  seriously impacted, resulting in scaling down of Annual Plan size, which has now been limited to Rs. 51,000 crore in 2012-13 as against  targeted Rs. 61,000 crore
  • Fund balances became negative in 2011-12, adversely affecting essential replacement /renewal of assets, operation and maintenance activities and critical safety & passenger amenity works. 
  • Will net an additional Rs 6,600 crore a year

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