New Delhi: Ahead of the proposed railway budget for 2013-14, Railway Minister Pawan Kumar Bansal on Wednesday announced a fare hike that will take effect from January 21 midnight.
Addressing a press conference here, Bansal said that having hiked the railway fares now, the government will not increase the tariff in the budget.
"Train fares will be hiked from January 21 for all passengers, including the AC-1 and AC-2 tier passengers who were affected in early 2012. The hike will be two paise per km to 10 paise per km across classes. All fares will be rounded off to Rs 5, and there will be no fare hike in the Railway Budget," he said.
Justifying the hike, Bansal said passenger segment losses are likely to touch Rs 25,000 crore in the current fiscal.
"Input costs have increased immensely while rail fares have remained stagnant. In fact there was a decrease in lower class fares. Given economic slowdown, we have not been able to so far achieve this year's targets in either freight or fare side," he added.
He said that the slowdown has further impacted railways' earnings.
He further said hat extra revenue earned through the fare hike will be used to maintain cleanliness and safety.
This is the first railway fare hike in ten years.
The proposals will rake in an additional Rs 1200 crore between January 21 and March 31 this year, the minister said announcing the decision and did not rule out a hike in the freight tariff.
Fares of Ordinary Second Class (suburban) trains will go up by 2 paise per km while for non-suburban travel it will be 3 paise.
Travel by Second Class Mail and Express trains will be costlier by 4 paise per km, while it will be 6 paise in Sleeper Class.
Travellers by AC Chair Car and AC Three Tier will have to shell out 10 paise more per km, First Class by 3 paise, AC Two Tier by 6 paise and AC First Class by 10 paise.
The fares for First Class, AC Two Tier and AC First/ Executive Class were already raised by 10 paise per km, 15 and 30 paise respectively in the current year's budget.
Breaking away from the populism of his predecessors, including Lalu Prasad and Mamata Banerjee, Bansal, who was made the Railway Minister in October last, told a press conference that the decision to hike the fares was "imperative" as lack of revision in the last 10 years has had a "telling effect" on the railway finances.
Dinesh Trivedi, who succeeded his party chief Banerjee, made a bold decision to hike fares in the Budget in February, 2012 to mop up an additional Rs 4000 crore but paid the price when he was made to resign by his party Trinamool Congress which was opposed to it.
The Bharatiya Janata Party (BJP) opposed the hike in train fares, and said the move was "unacceptable" and "atrocious".
"The government goes on increasing the price but they do not increase amenities and safety of the railways. It is absolutely unacceptable and atrocious," said Prakash Javedekar, BJP spokesperson.
"The fare hike once in ten years is not the issue. A hike is justified only if services are bettered. Users are ready to pay for good services. Start providing safety, better amenities and services... people are ready to pay," Javedekar told a news channel here.
Bansal said there would be no fare increase when the annual rail budget is presented in February.