Railway Ministry spurns ministry of finance proposal to levy safety cess on tickets

NEW DELHI: Railway ministry has not accepted finance ministry’s suggestion to levy a safety cess on tickets to set up a Rs 1.19 lakh crore rail safety fund.

The railway ministry has told the finance ministry that it would be not be right to levy any cess on tickets since the number of people travelling by train is declining and Railways could lose more passengers if fares are increased further. The national transporter had sought finance ministry’s help to set up a dedicated fund to make the railway network safer.

The finance ministry, in its reply, had told Railways to raise 75 per cent of the funds through a safety cess on tickets while agreeing to contribute to remaining 25 per cent. On November 20, in a major railway accident, 150 people were killed after a train derailed near Kanpur.

In a letter sent to Finance Minister Arun Jaitley last week, Railway Minister Suresh Prabhu said it has become imminent for the Railways to set up a safety fund to overhaul the rail network, said a senior official, asking not to be named.

“The minister has said that given the financial liability that has arisen due to the seventh pay commission award and loss in freight loading, it has become impossible for Railways to set up a fund on its own,” the official said.




“The minister has said that because the number of passengers travelling by train has seen a dip, levying a cess would not be possible.”

Railways has asked finance ministry to provide Rs 1.19 lakh crore over five years so that track and signaling infrastructure and rolling stock could be upgraded on safety parameters.

The works to be undertaken through this fund include track works, bridge rehabilitation, safety works at level crossing, replacement and improvement of the signaling system, improvement and upgradation of rolling stock and replacement of electrical assets.

Railways is staring at a financial crisis since its freight and passenger earnings have not increased as expected.

There is also the additional salary burden of nearly Rs 30,000 crore because of the seventh pay award. The Railways is yet to implement the recommendations of the Anil Kakodkar committee on safety submitted in February 2012.

The Railway Board has blamed lack of funds for its inability to implement the report that has 106 recommendations on rail safety. The report, if implemented in its entirety, could cost the railways over Rs 1 lakh crore.