It is said that for the last 7 to 8 years, railway passenger fares have not increased. This is not necessarily efficiency. This is not an achievement to be proud of. In the last 7 to 8 years, prices of inputs, steel, raw materials, consumable stores, diesel & other fuels and wages have gone up, some by 100%. The passenger fares should also have gone up. By not raising the fares, the Railways has forgone a huge amount with the result that developmental works could not be undertaken as much as possible.
The Railway Minister has repeatedly mentioned in her speech that due to financial constraints several works could not be undertaken. Had the fares been increased even by just 10%, (there is justification to increase by higher percentage), Railways could have earned nearly Rs.10,000 crores (Rs.100 billion) more in the last 7 years, which would have enable it to undertake expansion projects. There is need to install escalators, to cross the lines and this could have been undertaken with the additional revenues.
The train fare in 1970 from Chennai to New Delhi used to be around Rs.60 and it has now gone up to around Rs.600, i.e. 10 times in 40 years. During the same period, per capita income in India has gone up by more than 100 times.
Government of India has invested a huge amount in Railways. If revalued, the value of Railways assets – land, buildings, machinery, rails, rolling stock, consumables etc. would be a minimum Rs.1,000,000 crores. Government’s investment in the Railways would be even more than this as for several years, Railways have been incurring loss. At 10% of the investment, Railways should pay dividend of more than Rs.100,000 crores to the Government but it pays only around Rs.66,00 crores. Even after more than 150 years, it is seeking budgetary support from General Revenues. These do not show efficiency.
Thus there is no reason for the Railways for not increasing the fares.