Dynamic fare pricing is similar to that being used in the aviation sector where fares will be hiked in the peak seasons in busy sectors and only beyond a certain distance. In other words, passengers will see a steep hike in fares in the busy Delhi-Howrah and Delhi-Mumbai sectors. A Board member has been quoted as saying that this will be a face saving exercise for Railways Minister Dinesh Trivedi from those who have not agreed to a hike in fares since 1999.
An official commented, "The foundation for air sector like dynamic price hike in the Railways will be made in this Budget as the issue is close to the rail minister. He has been hinting to go the airlines way."
He added, "At least, we would not be raising fare across the board, but in busy sectors and beyond 400 km. The raise would not affect passengers without reservation and those traveling in reserved second-class coaches would only get affected if they are traveling beyond 400 km. Passengers of AC and first class will have to pay higher fares in limited routes in specific periods. This would not be announced immediately but would be pitched for strongly in this Budget."
The dynamic pricing policy is touted to be one solution to salvage the cash crunch in the Railways. There have been hints that a service tax of 10.2 per cent may be levied on tickets in AC's and first-class. There are also chances of an additional levy of surcharge tax in the name of safety, modernisation and station redevelopment.