Rlys may hike fares to bear burden of 7th pay panel

Mukesh Ranjan

Tribune News Service

New Delhi, January 18

Finding ways to bear the burden of implementation of the 7th Pay Commission, the Indian Railways is mulling a hike in passenger rail fares. 

Officials in the Ministry of Railways contemplating the move after the Finance Ministry has rejected the public sector behemoth's demand for Rs 32,000 crore as revenue grant and instead suggested it to look for measures to improve revenue to meet its requirements.

Union Minister for Railways Suresh Prabhu in a kind of "SOS" had sought a grant of Rs 32,000 crore from the Finance Ministry to implement the 7th Pay Commission recommendations, while maintaining that his ministry would be able to bear the cost in two to three years. 

The country's largest public sector is also finding it hard to meet the revenue target set for freight due to tough competition from road carriers. Officials in the ministry said there was a very little scope to further increase in freight charges.

They said at present, the Railways payout on salary, allowance and pension was almost about 50 per cent of the total revenue. But once the recommendations of 7th Pay Commission are implemented, the outgo would jump to 68 per cent of current revenue mop up, they added.

Even while the Railways chose to fully absorb the windfalls out of the sharp slump in crude prices, it is in no position to implement the recommendations of the 7th Pay Commission "without making an upward revision of the passenger fare" of the Sleeper and 3rd AC, said the officials. 

The Railways has kept the dynamic fuel adjustment component of the passenger and freight fare in abeyance ever since crude prices slipped into a free fall. At present, the crude is below $30 per barrel.

Politically too, the officials said, this year is not going to be tough for the ruling BJP to take the unpopular decision of a hike in passenger fare, as five states are scheduled to go to the Assembly polls.