Suresh Prabhu asks citizens to give up their railway subsidy

Minister of Railways Suresh Prabhu has requested citizens to voluntarily give up their fare subsidy, special weekend fares for some trains and last-minute discounts on vacant berths to help increase the earnings of the Indian Railways.

Prabhu sent the proposal to the Railway Board on November 24. According to sources quoted by the Indian Express, important policy interventions would be decided in the next few days. But officials say that it would be tricky to give up fare subsidy.

As far as the Petroleum Ministry was concerned, the bank accounts of the customers were connected to their LPG connections, which made it easier to ask people to give up their cooking gas subsidy. 

But this model may not work for railways which is why a new model is being drawn up with a pilot project for e-tickets only.

The Railways have been saying that only 57 percent of the journey expenses is retrieved through the fare which means that the remaining 43 percent is the quantum of subsidy on each ticket even though the department's accounting system does not provide the exact expenses. The system is in the process of going through an overhaul.

The idea of providing some "slabs" of subsidy surrender is being considered for the pilot project. It basically means that the passenger can decide how much subsidy he/she wants to give up. The railways is also working on linking its various passenger concessions, including concessions for senior citizens, with Aadhaar.

Giving a 10 percent discount tentatively on last-minute bookings of vacant berths is also being discussed. According to Prabhu, it would be a good idea to rationalise the last "flexi-fare" to get passengers for vacant seats. The railways is working on resolving the problem of informing the public about last-minute vacancies.

Prabhu has also focused on special fares for sectors in popular Rajdhani and Shatabdi routes which do not receive much funding or assistance. Sources told the IE that this decision could be a way to compete with commercial transport options in the sub-200-km distance category.

Senior officials in the railways said that idea would be brought to effect in different ways because the Railway Board found them useful and possible to execute. 

The Railways are experiencing a shortage of at least Rs 20,000 crore by the end of this fiscal, despite passenger business giving them around Rs 50,000 crore earnings.