New Delhi, December 27: There could be a hike in passenger fare and freight charges as the Indian railways has initiated a process to "rationalise" cost of train tickets. The development comes a month after Prime Minister Narendra Modi's office asked railways to "explore possibilities of scheduled increase in passenger fare". Rationalisation of fare is being considered as railways is facing a financial crunch in the wake of an economic slowdown. Indian Railways to Spend Rs 18,000 Crore to Run Trains at 160 Kmph on Delhi-Howrah and Delhi-Mumbai Route.

"We are going to rationalise the fares and freight rates. Something is being thought about. I cannot divulge more, this is a sensitive subject. While the freight fares are already high, our target is to draw more traffic from road to railways in this regard," railway board chairman VK Yadav was quoted by Times of India as saying. According to a recent report, passenger fare could see an increase of 5 to 40 paise per kilometre. Indian Railways Trains With Low Occupancy May Offer 25% Discounts on Chair Cars And Executive Seats.

A railway spokesperson, however, said that rationalisation of fare doesn't mean ticket cost will only increase. "There is no proposal to hike fares. Rationalisation of fare is being thought of, which does not mean that fares will be increased, it may decrease also," he was quoted as saying. Yadav admitted that railways is facing a financial crunch. Railways' estimated expenditure including the pension of 13 lakh employees is Rs 2.18 lakh crore against Rs 2 lakh crore that it earns.

"Nearly Rs 50,000, which is 25 percent of the income goes for pension. If the finance ministry takes care of this, our operating ratio will be 70 percent," he said. There is no clarity on whether railways is eyeing an increase in revenue from the passenger segment or freight. Revenue generation has been an uphill task for railways as there has been a decline in revenue and an increase in expenditures.

In September 2019, railways had recorded a decline in its overall revenues for second straight month and at 38-months high pace of 4.2 per cent. In October, the decline was even sharper at 7.8 per cent.

(The above story first appeared on LatestLY on Dec 27, 2019 12:41 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).