Indian Railways may hike passenger fares by up to 3 percent from October 7, reveal media reports. However, it is still under examination, say Railway Minister Mallikarjun Kharge. He further said,"Fuel adjustment component (FAC) was announced in the budget and as per the budget proposal it should have been implemented from October 1. The file containing the FAC proposal has come to me and I am examining it and a decision will be taken shortly."
Kharge did not rule out any possibility of FAC-linked revision in passenger and freight tarrif to lower the margin of the losses in passenger segments. " I am examining it. As soon as we arrive at some conclusions, then we will decide on it," he said.
As per the budget, the fuel component is segregated from tarrif as FAC. And the railways is expected to revise the passenger and freign rates in every six months according to the input cost and the market condition.
Going by teh calculation, the railways will have to bear a burden of Rs 1,200 crore because of increased input and energy costs in the next six months.Currently, the cross subsidy for passenger service is touching Rs 26,000 crore in a year.
While the then Railway Minister Pawan Kumar Bansal had announced the implementation of FAC-linked revision in freight tariff alone from April 1, the passenger fare was not touched since January 2013 this year.
The Railways had decided not to pass the additional burden of Rs 850 crore (due to fuel hike) to the passengers and accommodated it then. But now, it has imposed a 15 percent hike on all commodities during the busy season from October 1.