The government Friday raised the railway passenger fares by 14.2 percent in all classes and freight charge by 6.5 percent effective form June 25.
The new passenger fares and freight rates aimed at mobilising resources for the cash-strapped Indian Railways come just days after Prime Minister Narendra Modi warned caountrymen to get ready for some "bitter medicine" needed to revive the economy and ahead of the full railway budget next month.
The railway ministry said the revision of rates was done as part of interim budget presented by the previous UPA-II government, but was not implemented because of the 10-phase Lok Sabha elections spread over April-May.
It said the annual expenditure of the ministry could not be met unless the revised rates as finalized by previous government are implemented.
Railway Minister Sadananda Gowda Thursday said the government is short of resources and some resource mobilisation should be taken as a priority.
The national transporter is under a massive fund crunch with subsidy on passenger fares touching Rs.26,000 crore, and needs huge investments to modernise and upgrade its safety system.
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The last fare hike was in October 2013.
According to a ministry release, there will be a flat 10 percent increase in all classes. In addition, there will be an increase of 4.2 percent in fares on account of FAC (fuel adjustment component) which is due from April 2014.
There will be no increase in fares up to minimum distance.
Second class monthly season ticket (MST) fares of suburban and non-suburban trains will be charged on the basis of 30 single journeys instead of approximately 15 single journeys. Fares of first class monthly Season Tickets will be charged at four times the second class MST fares as is done presently.
Revised fares will also be applicable as per the existing method of computation on Quarterly Season Tickets (QST), Half Yearly Season Tickets (HST) and Yearly Season Tickets (YST).
There will be no change in charges for reservation fee, superfast surcharge etc. Such charges, wherever applicable, will continue to be levied additionally as per existing instructions, said the ministry, adding that service tax will continue to be levied as applicable.
The revised fares will also apply to tickets issued in advance for journeys to commence on or after JUne 25, 2014.
In the case of tickets already issued at pre-revised rates, the difference in fares and other charges on or after June 25 will be recovered either by TTEs on the trains or by the booking/reservation offices before the commencement of journey by passengers.
As for freight, a flat five percent increase in rates and an additional increase of 1.4 percent on account of FAC, which was due since April 2014, would be charged. This means an overall increase in freight rates will be 6.5 percent on major commodities.
The ministry said certain concessions in case of some of the commodities have been withdrawn.