No passenger fare hike but freight rates, ticket charges up

Sparing rail passengers from fare hike, the Railway Budget today slapped an across-the board 5.8 per cent increase in freight rates and raised reservation and related charges to net in additional Rs 4,683 crore a year.
Continuing efforts to clean up railway finances, Railway Minister P K Bansal, the first Congress Minister to present a Railway Budget in 17 years, adopted the dynamic fuel adjustment component (FAC)-linked revision in tariffs, proposed by his Trinamool predecessor Dinesh Trivedi last year.
The 5.8 per cent increase will cover among other things foodgrains and pulses, coal, iron and steel, urea, iron ore, diesel, kerosene and LPG, which the industry and political parties feared could lead to further inflation spiral.

Beginning April 1, the FAC will be adjusted in freight rates twice a year in line with changes in diesel price. Any reduction in fuel prices could result in lowering of the freight rates.
"In the light of deregulation of high speed diesel (HSD), Railways' finances need to be rationally insulated and to this end a mechanism to neutralise the impact of fuel prices on operating expenses is required to be put in place," Bansal said presenting the Budget in Lok Sabha.
While not hiking the basic passenger fares, which were raised only last month to rake in Rs 6,600 crore, the Budget made an upward revision of reservation fee and supplementary charge for superfast trains that will mean an increase ranging from Rs 5 on the second class to Rs 25 on AC 1st and Executive Class.