D.K.Mittal Panel calls for regular hike in rail fares

D.K.Mittal Panel calls for regular hike in rail fares

New Delhi: The Railways needs to increase its fares regularly and continue doing so for the next few years to eventually bring them on a par with the road sector and link fare-hike with the quarterly Consumer Price Index (CPI) data of the RBI, a high-level panel headed by former secretary, Financial Services, D K Mittal has recommended. The report was submitted to Railway Minister Suresh Prabhu Tuesday.

Recommending a slew of measures to increase earnings through tariff as well as non-tariff avenues, the committee has made a strong case to increase the highly subsidised and loss-making suburban second-class train fares. It has recommended that these fares be increased by 2 paise per km every two months till they reach a break-even point.

Prabhu had set up this high-level committee to explore ways to increase revenue and initiate financial reform in the Railways. The report, accessed by The Indian Express, is expected to have far-reaching impact as it will form part of the various inputs in making Prabhu’s first Rail Budget next year.

Making a case for more of dynamic pricing, the panel has advocated ‘flexi fares’ in line with airlines along with greater choice to passengers in terms of seat selection and the like. The idea of introducing seasonal fares like airlines has also been recommended. All “holiday special” trains, it has recommended, be run on premium tariffs.

The Mittal panel has advocated setting up of a Rail Tariff Committee, and has also recommended that railway increase the minimum chargeable distance from present 10 km to 20 km for suburban trains and from 50 km to 100 km for mail/express trains.

Since train fares in India are lower than fares of public transport in the road sector, the committee has said parity should be brought between the two within the next five years. Current train fares are between 30-60 per cent of fares prevailing in the road sector whereas globally they are equal if not higher, the report has noted.

Train fares should be linked to 25 per cent of the CPI data released by the RBI every quarter, it has said. Along with increase in fares, the report has also noted that passenger traffic accounts for 65 per cent of movement but contribute only 26 per cent of earnings.