Rail reservation fees may be hiked

After sparing passenger fares in three successive Budgets, the railways are now planning to sneak in a hike by raising reservation fees for tickets. The move is expected to generate about Rs 355 crore additional revenue from passenger traffic.

The railways are set to raise reservation fees across all classes by Rs 5-Rs 10. The reservation fee for second class, second sleeper and AC chair car will be raised by Rs 5, while that of the AC-II and AC-III class will be increased by Rs 10.

At present, the reservation fee for second class and second sleeper is Rs 15 and Rs 20, respectively The fee is Rs 25 for AC chair car, AC-II and AC III. The changes are expected to be notified next week.

Besides, Railway Minister Lalu Prasad's moves to rationalise freight tariff in the Budget are expected to generate additional resources of Rs 650 crore during the current financial year.

The railways also intend to cut the freight tariff for petrol and certain steel products like HR coil, rods and pipes as a mid-course correction. Kerosene tariff is proposed to be enhanced as part of the initiative.

The railways have been under pressure from the Planning Commission and the Prime Minister's Office to raise passenger fares. The view has been that the railways should reduce the level of cross-subsidisation, whereby high freight on carrying goods enables them to subsidise passenger fares.

The recent report of the Comptroller and Auditor-General of India, in fact, had also pulled up the railways for not increasing the passenger fares. It said the railways incurred a loss of Rs 700 crore on account of non-revision of fares.

Moreover, in line with the idea of reduction in cross-subsidy, the railways also have plans to reduce freight for petroleum products, which attract the highest tariffs. The railways carry petroleum at a rate which is 1.4 times the cost. The railways plan to reduce the tariffs for petroleum by about 25 per cent.

The passenger fares were last increased in 2002-03, when the change was in the range of 5-11 per cent. The railways, however, had to face a decline in passenger traffic the very next year.