West Bengal Chief Minister Mamata Banerjee, a key ally of the ruling United Progressive Alliance (UPA) government at the Centre, will have the last word on proposals for rises in railway fares in the coming Budget.
Despite the apparent intent of Union Railway Minister Dinesh Trivedi and Railway Board officials, officials say they anticipate “only cosmetic changes”.
According to the Board’s internal statistics, the railways covered for losses in passenger fares by charging freight services around 50 per cent more than the expenses incurred on these. Trivedi has vocally spoken of the need for linking the fuel components from the fare to market prices of fuel, inclusive of diesel and electricity. Officials say Banerjee has stayed this and another idea of rounding off fares to the next higher value.
Even if the railways were to implement Trivedi’s stand, officials said the unreserved class is likely to stay untouched. Yet, of the losses on passenger fares of around Rs 20,000 crore in 2009-10, around Rs 12,000 crore was from the unreserved II class category in mail/express and ordinary trains, in addition to suburban trains. The rest of the losses, around Rs 8,000 crore, are from reserved classes, in which the sleeper class alone accounts for Rs 6,000 crore. These are bound to escalate in 2011-12.
Separating the fuel component as mentioned is expected to generate less than Rs 1,000 crore. The main component of rail expenses, around 60 per cent, is on staff pay and pensioners. The staff gets an annual rise of three per cent after the sixth pay commission and a dearness allowance) rise twice a year. Even by conservative estimates of inflation, expenses on staff increase by at least 14 per cent per year.
In freight services, the railways incurred around Rs 40,000 crore expenditure but generated around Rs 60,000 crore in revenue during 2009-10.
“The railways’ attempt to serve passengers on all ranges of distance is a strategic disaster. There is a great demand of long-lead (greater than 250 km) passengers the railways is not able to cater to. A big percentage shifts to lower class because of unavailability of space in AC coaches. This creates a distorted impression of demand,” said a rail official.
Though the railways always shows an incremental growth in passenger volume and lead distance, the unmet demand of long-lead travel is rising at a higher rate, said another official.
