AC fare likely to increase, general class will remain cheaper

The Parliamentary Standing Committee on Railways has presented its report in the winter session of Parliament. The committee has recommended review of air conditioned (AC) class fares to reduce the revenue losses of the Railways. Along with this, the committee has emphasized on ensuring that general class travel remains affordable. If the government accepts the committee’s recommendation, there may be an increase in AC category fares.

Need to reduce revenue deficit

BJP MP C.M. The committee headed by Ramesh analyzed the budget estimates for 2024-25. according to the report:

• Railways is expected to earn revenue of Rs 1.8 lakh crore from freight transportation.
• The revenue from passenger fares is expected to be only Rs 80,000 crore.

The Committee believes that a detailed analysis of different categories of rail fares should be done so that passenger revenue can be increased.

Possibility of increase in AC class fares

The parliamentary committee has suggested that:

• General class fare should be kept cheap.
• AC category fares should be reviewed to reduce increasing operating costs and losses.

This may mean that traveling in AC class may become expensive in the future.

Review of expenses and recommend optimization

The committee has recommended Indian Railways to review the operational expenses of passenger trains. Additionally, emphasis has also been laid on optimizing expenses to keep ticket prices affordable.

Railway Ministry statement:

According to the Railway Ministry, every year a discount of about Rs 56,993 crore is being given to the passengers. Passengers get a discount of 46 percent on every ticket.

Recommendation to improve catering services

The committee has also made recommendations regarding the catering services of the Railways:

• Suggestion to eliminate catering services to improve financial performance.
• It is recommended to provide quality food at competitive prices.
• There is a need to reduce the financial burden of social service responsibilities related to food.

Debate on privatization of railways

Regarding the debate on privatization of railways, the committee has recommended increasing participation of the private sector in railway infrastructure.

Opposition’s allegations and Railway Minister’s statement:

• Due to the Railway Amendment Bill 2024, the opposition has called it a secret step towards privatization of railways.
• However, Railway Minister Ashwini Vaishnav rejected this claim and said that railways are not being privatized.

Need to modernize infrastructure

The committee said that modernization of Indian Railways infrastructure requires large-scale capital investment.

Main recommendations:

1. AC class fare of Railways should be fixed as per the operating cost.
2. General class fare should be kept cheap so that people of all sections can take advantage of it.