The parliamentary standing committee on railways has recommended a review of air-conditioned (AC) class fares to minimise revenue losses in the passenger segment while ensuring that general class travel remains affordable.
This suggestion stems from concerns over the significant revenue disparity between the passenger and freight segments, which is affecting the overall financial health of Indian Railways.
The committee, chaired by BJP MP C. M. Ramesh, noted the budget projections for 2024–25, estimating passenger revenue at Rs 80,000 crore compared to Rs 1.8 lakh crore from freight.
It emphasised the need for a detailed evaluation of fares across different train classes to enhance passenger revenue. The panel acknowledged that general class travel should stay accessible for the masses but stressed the importance of aligning AC class fares with operating costs to reduce losses.
Railways urged to cut costs for ticket affordability
Additionally, the report urged Indian Railways to review operational expenses for passenger trains and optimise costs to maintain ticket affordability. The Ministry of Railways has clarified that concessions amounting to Rs 56,993 crore annually, including a 46% discount on every ticket, make reinstating senior citizen concessions unlikely.
The panel also highlighted inefficiencies in categories like catering services, recommending their elimination to improve financial performance. It suggested offering quality food at competitive prices while reducing the financial burden of social service obligations related to catering.
Indian Railways to be privatised?
Following a heated debate in the Lok Sabha regarding railway privatisation, the parliamentary standing committee has recommended that Indian Railways explore increased private sector involvement in its infrastructure.
The debate was sparked by the Railways Amendment Bill, 2024, which faced strong opposition from lawmakers, who criticized it as a covert move toward privatisation. However, Union Railways Minister Ashwini Vaishnaw countered these claims during his response in the house, defending the bill and refuting the allegations of privatisation.
“The committee is of the opinion that the modernisation of Indian Railway infrastructure demands huge capital investment. The committee feels there is ample scope for improvement in Railways’ infrastructure and a need to significantly increase its planned expenditure,” according to the panel’s report on the Ministry of Railways’ demand for grants.
