The parliamentary standing committee on railways has recommended a review of air-conditioned (AC) train fares. The panel’s focus is on balancing the financial sustainability of Indian Railways with the need to maintain affordable travel options for the general public.
Chaired by BJP MP C. M. Ramesh, the committee expressed its concern about the significant disparity in revenue generation between the passenger and freight segments. According to the budget projections for 2024-25, passenger revenue is estimated at Rs 80,000 crore, whereas freight is expected to contribute Rs 1.8 lakh crore. This stark difference is straining the overall financial health of the national transporter, leading to the need for a comprehensive review of fares across various train classes. The committee’s recommendations are designed to ensure that while AC class fares align with the cost of operations, general class travel remains affordable for the masses. This is critical, as the affordability of general class tickets has long been a cornerstone of Indian Railways’ accessibility. At the same time, the panel noted that optimising the revenue from AC classes could help minimize losses in the passenger segment.
The report also highlighted the necessity of reviewing operational expenses to make train travel more cost-effective. It pointed out the substantial annual cost of concessions, including a 46% discount on each ticket, which contributes to a financial burden of Rs 56,993 crore. With this in mind, restoring senior citizen concessions is deemed unlikely. Additionally, the committee urged Indian Railways to streamline operations by addressing inefficiencies in services like catering. It recommended providing quality food at competitive prices, while eliminating unprofitable catering services, to reduce the financial burden of social service obligations. On a broader scale, the panel suggested increasing private sector involvement in modernising railway infrastructure. This comes after debates in Parliament, particularly around the Railways Amendment Bill, 2024, which some lawmakers fear could lead to privatisation. However, the Union Railways Minister, Ashwini Vaishnaw, defended the bill, emphasizing the need for capital investment and modernization. As Indian Railways navigates these complex financial and operational challenges, it is clear that balancing revenue optimization with affordability for the public remains a key priority for both lawmakers and officials.
