Indian Railways hikes passenger and freight rates

Indian Railways hiked passenger fares by 14.2% in all classes and freight charges by 6.5% with immediate effect on Friday.

However, it included few clarifications as:

The Order of Fare and Freight revision issued by the Ministry of Railways, as finalised by the previous Government, is only 10% hike in Passenger Fare and 5% hike in Freight Rates.

The figure of 14.2% hike in Passenger Fare and 6.5 % hike in Freight Rates is inclusive of the Fuel Adjustment Component (FAC) (4.2 % for Passenger Fare and 1.5 % Approx. for Freight Rates) which is done once in six months routinely, depending upon the fluctuations in Oil Prices similar to retail prices of Diesel and Petrol at Petrol Bunks. The additional burden due to oil Prices fluctuation, will get reviewed if the price of Oil decreases. It is pertinent to note that the Fuel Adjustment Component (FAC) linked revision has already been implemented twice earlier by the previous government and was last done in October 2013.

The Railway passenger fare and freight rate revision was done as part of interim budget presented by the previous government. But the implementation of revised rates was withdrawn by previous regime because of the elections. Meeting the annual expenditure would not be possible unless the revised rates as finalized by previous government is implemented, hence order of withdrawing implementation of revised fare and freight has been withdrawn. Accordingly, the revised passenger fare and freight rates & freight structure rationalization will come into effect from 25th June 2014.

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