Praveen Kumar Singh
Monday Jan 3rd 2011
The Railways plans to increase passenger fares to increase earnings and improve the dwindling operating ratio, which revolves around 100% at present. Simultaneously, it will give targeted concession to the low-income people through the use of unique identification (UID) numbers being rolled out in the country.
Higher operating ratio, a measure of what part of earnings is spent on operation, reduces the chances of railways having surplus funds to invest in growth projects as most of the earnings is exhausted in operating trains.
Last week, the Railways had raised freight rates for key commodities like coal, iron ore, steel, cement and sugar to make up for the gap between escalating expenditure and stagnant revenues.
In the last seven years, the Railways has increased freight rates at regular intervals but the passenger segment remained untouched due to political priorities of the concerned ministers. As a result, passenger fare-to-freight ratio has fallen to 0.3 compared with 1.2 in China.
Higher operating ratio, a measure of what part of earnings is spent on operation, reduces the chances of railways having surplus funds to invest in growth projects as most of the earnings is exhausted in operating trains.
Last week, the Railways had raised freight rates for key commodities like coal, iron ore, steel, cement and sugar to make up for the gap between escalating expenditure and stagnant revenues.
In the last seven years, the Railways has increased freight rates at regular intervals but the passenger segment remained untouched due to political priorities of the concerned ministers. As a result, passenger fare-to-freight ratio has fallen to 0.3 compared with 1.2 in China.