Parliamentary committee says Railways should review AC class fares to boost passenger revenues

Parliamentary Standing Committee on Railways recommends increasing passenger revenue, private sector participation, LHB coaches, and reducing social service obligations for Railways

The Parliamentary Standing Committee on Railways, in a draft report, has observed that the revenue generated by the Railways from its passenger segment is substantially lower than its freight earnings. 

“The Budget Estimates for passenger revenues for the year 2024-25 have been kept at ₹80,000 crores against freight revenue estimate of ₹1,80,000 crores,” the committee said in the report.

The committee said that to increase net revenues, the Railways must increase its earnings from the passenger segment. It recommended a comprehensive review of passenger fares in different trains and classes. It stated that the Railways should review the fares of AC classes by aligning them with costs incurred to reduce losses in the passenger segment.

The committee observed that the annual plan for the year 2024–25 has been kept at ₹2,65,200 crores, which is the highest ever. The committee also recommended that the Railway Ministry must find ways to increase private sector participation in creation of railway infrastructure.

The Budget allocation for rolling stock for 2024-25 is ₹54,113.78 crore, which is an increase of ₹156 crore over the actual expenditure during 2023-24.

The committee urged the Ministry to increase the pace of replacement of Integrated Coach Factory (ICF) coaches with Linke-Hofmann-Busch (LHB) coaches as the latter provide improved safety and comfort. The ICF coaches can be turned into newly modified goods (NMG) coaches for carrying automobiles and other goods, it said.

The committee noted that the Railways had not met its target for production of coaches in 2023-24. It urged the Railways to take urgent steps to increase production capacity at its production units.

The committee noted that the net social service obligation of the Railways for 2022-23 stood at ₹40,190 crores. The major components of social service obligations are pricing of fares below cost, losses on parcel, luggage, postal and catering services, losses on suburban services, and so on.

“The committee is of opinion that that to limit these losses Indian Railways must undertake comprehensive review of these losses. Further losses on categories like catering services must be eliminated on priority basis. The committee urges the Ministry to endeavour to provide quality food at competitive prices and simultaneously aim to reduce Social Service Obligations on account of catering services,” the report said.

The committee urged the Railways to seek assistance from external agencies, if necessary, to enhance revenue by fully utilising the extensive advertising space and substantial land holdings at its disposal. It urged the Railways to further augment its internal resources by promoting development and leasing commercial complexes in and around railway stations to tap the high footfall of travellers.

The committee concluded that land acquisition was a significant factor contributing to delays in completion of railway infrastructure projects. It is pertinent that Railways should consider potential policy modifications to accelerate the land acquisition process, the report said.

Published - December 11, 2024 09:30 pm IST