To battle fund crunch, Indian Railways may link fares to inflation

To battle fund crunch, Indian Railways may link fares to inflation

Facing a severe cash crunch, the Indian Railways was looking to link passenger fares with inflation, sources said, stressing the need for radical steps to improve the finances of the world’s fourth biggest train network.

The fares could be linked to the consumer price index (CPI), which basically means that with a rise in shop-end prices, fares will also go up.

“Several radical steps need to be taken and this can be one of them. Linking passenger fares with the consumer price index CPI will enable the railways to recover costs,” an official said on condition of anonymity. consumer price indexCPI index tracks shop-end prices of a select basket of goods.

Though railways ferry 23 million people every day, its passenger earnings are dismal. This year’s losses in passenger earnings are estimated to be around Rs 30, 000 crore, that too at a time when the public transporter needs an additional Rs 32,000 crore to implement the seventh pay panel recommendations. Read More…

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