Here is some really big and disappointing news for frequent train passengers! Indian Railways may hike ticket prices from February next year. The government is planning to increase train fares, according to Zee Business sources. The government is likely to announce an increase in fares after the current Parliament session. The sources have said that the PMO has already received the green signal to increase railway fares. The reason behind the hike in fares is the weak economic condition of the Railways, which is why the government is in favour of implementing the increased fares from February 1, 2020.

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8-10 percent hike in Indian Railways train fares

The government's proposal may look to increase passenger fares by 8-10 percent. While, the railway is not in favour of any increase in the freight charges, as this business is already seeing a tough battle with road freight options and transportation businesses.

According to the proposal, the government wants to reduce cross-subsidy by increasing passenger rail fares. Cross subsidy means compensating freight earnings by imposing passenger fare losses. The government is likely to adopt a new formula for a hike in passenger fares. The new formula may lead to a more hike in fares on the routes with more passengers. Meanwhile, a partial increase in the fares for the routes with stable or low passenger numbers.

Which routes to become expensive

The routes with a high number of passengers like Delhi-Mumbai, Delhi-Chennai, Mumbai-Goa, Mumbai-Ahmedabad may get a fare hike by 8-10 percent. While fares of the routes like Ajmer-Jaipur, Kanpur-Lucknow, Chandigarh-Ludhiana are likely to be marginally increased. However, there could be a partial hike or no hike for the routes with more road transportation options.

Why increase rail fares

The operating ratio of the railways is continuously deteriorating, which has touched 108% in the last 7 months i.e. in the period of April to October.

The operating ratio means how much money Railways spends to earn Rs 1.

If this figure crosses 100, it means that the cost of the Railways is much higher than its total income, which is not a good sign.

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According to sources, Railways has not been able to meet its earning targets in the last 7 months with a deficit of Rs 19,000 crore. Meanwhile, there is an additional expense of Rs 5,000 crore for expansion targets.

However, Railways has been putting in all the efforts to increase rail fares. Former Railway Board Chairman Board, Ashwini Lohani had sent a proposal to Railway Minister Piyush Goyal three times to discontinue the Flexi Fare Fare system from all the premium trains. To which the decision was hung up due to elections in several states. However, since then the financial position of the railways has declined further compelling Railways to take further steps to get relief.

Earlier in 2014, the Modi government announced a passenger fare hike of 14.5 percent and a fright fare hike of 6.5 percent, which was justified by the govt, quoting the economic condition of Railways.