Indian Railways may rationalise fare, cut freight rates to boost economy

Indian Railways
The railways may cut freight rates in a bid to boost economic growth, besides “rationalising” passenger fares. While Railway Board Chairman V K Yadav refused to say if passenger fares would see an increase, he hinted that freight rates might be reduced.


"We are going to rationalise the fares and freight rates. Something is being thought about. I cannot divulge more as this is a sensitive subject. While freight fares are already high, our target is to draw more traffic from road to railways in this regard," Yadav said on Thursday.


In September, the railways had announced several incentives to boost freight traffic. These included deferring the levy of busy season charge, waiving the supplementary charges applicable to loading rakes, and introducing the round-trip charge on container traffic.


The railways has been hit hard by the economic slowdown, with earnings from passenger fares dropping significantly. Passenger earnings stood at Rs 40,415 crore in the April-December period of 2019-20, according to Rail Drishti, the national transporter's publicly available monitoring platform. Passenger earnings stood at Rs 51,066 crore in 2018-19.


The Comptroller and Auditor General (CAG) in its report tabled in the recent Parliament session said the railways recorded an operating ratio of 98.44 per cent in 2017-18, the worst in the previous 10 years.


Fares were last increased in June 2014, soon after the Narendra Modi government came to power. Passenger fares were hiked by 14.2 per cent and freight fares by 6.5 per cent.


About a month ago, the railways had announced an extension to another major initiative to raise earnings — the flexi fare scheme — by a period of one year till March 2021. Launched in September 2016, the scheme is applicable on premium train categories like the long-distance Rajdhani and Duranto expresses as well as Shatabdi Expresses that ply on shorter routes.

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