There was no increase in basic passenger fares, these having been raised just a month before. The Indian Railways is still looking at around Rs 25,000 crore of cross-subsidisation for the passenger segment in FY14, confirmed a senior railways official.
The passenger earning target is Rs 42,210 crore in 2013-14, a 30 per cent increase over 2012-13. The number of passengers is expected to rise by 5.6 per cent. The increased earnings would come from the rise in fares, incremental traffic and increase in supplementary charges.
Bansal said in the budget speech, "There are a number of charges which have not been revised for the last several years. These are in the form of compensation of cost actually incurred by the railways in rendering relevant services. I propose a marginal increase in supplementary charge for superfast trains, reservation fee, clerkage charge, cancellation charge and tatkal charge. However, I propose to abolish the concept of enhanced reservation fee, with a view to simplify the fee structure, having already discontinued the development charge in January."
Of the Rs 3,300 crore the railways was earlier expecting to lose from the passenger fare segment because of the rise in price of diesel, it would now be bearing the burden of only Rs 850 crore. The diesel rise has been partially offset by introducing a fuel adjustment component in freight and an increase in supplementary charges. A senior official said, "The increase in passenger fares will vary according to the base fares but it will be miniscule, as low as one per cent for the reserved category passengers."
Bansal was cautious on keeping passenger fares insulated from the fuel component. "The freight tariff will be having a fuel adjustment component, which would be reviewed every six months. However, we would be absorbing around Rs 850 crore of the additional burden because of the fuel hike in the passenger segment," said a senior railways official. Experts said the railways had to walk a tightrope in this budget as 2014 was an election year.
The railways earned Rs 1,200 crore additional revenue in 2012-13 owing to the passenger fare rise. However, it did not add much to overall revenue. "The additional Rs 1,200 crore just made up for our passenger losses in 2012-13. We were already suffering losses because of the volume of traffic on long distances," said a senior official.
According to the budget speech, "Considering the partial rollback of passenger fare increase, mitigated somewhat by the subsequent fare adjustment in January 2013, the revised passenger earnings target is proposed at Rs 32,500 crore, i.e. reduction of Rs 3,573 crore over the budgeted estimate of Rs 36,073 crore in 2012-13."
The number of passenger trains increased from 8,897 in 2001-02 to 12,335 in 2011-12. Yet, the losses on these operations continue to mount, increasing from Rs 4,955 crore in 2001-02 to Rs 22,500 crore. It is estimated at Rs 24,600 crore in 2012-13.