Now, a ‘Give it Up’ Campaign for Rail Fare Subsidy

The government plans to give rail passengers an option to “voluntarily forego” their subsidy on train fares. The development comes in the light of a huge subsidy burden of more than Rs 30,000 crore faced by the Railways on an annual basis. Out of this 1600 crore alone is for concessional fares. Confirming the development, a senior railway official said, “The scheme will be launched from August giving the passengers the option to forego either 100 percent or 50 percent of the subsidy.” A similar mission launched by the ministry of petroleum was an instant hit with more than 10.5 million liquefied petroleum gas (LPG)-consuming households opting out of the subsidy, saving more than Rs 4,000 crore for the government exchequer. 

According to the Railways, the idea came to minister Suresh Prabhu when a passenger, Avtar Krishen Kher, sent back a cheque in the name of IRCTC for the differential amount of the actual fare and the subsidy, which was around Rs 950 for his trip. The railways recovers only close to 57 per cent of the cost of travel on each ticket, while on suburban tickets it comes to around 40 per cent. While passengers travelling by suburban and short-haul trains account for 52 percent of the traffic, their share in total passenger revenues was just around 6-7 percent. This segment accounted for around 60 percent of the annual subsidy burden.

“We expect the people who are well-off to forego the subsidy, as details of this are already printed on tickets,” the official said. This scheme will be available for all the passengers, including army personnel, senior citizens, journalists, and students. The major beneficiaries of this scheme are the Senior Citizens accounting for about 1300 crores. Earlier, the Railways also introduced a dynamic fare system for its Rajdhani and Shatabdi trains. The scheme will be introduced in phases as the accounting systems are being thoroughly overhauled.