Now, government wants you to give up rail fare subsidy

NEW DELHI: After the success of the 'Give-It-Up' campaign on cooking gas subsidy, the government has drawn up a similar plan for rail fares, giving passengers the option to voluntarily forego the subsidy on tickets.

The railways plans to launch the scheme next month. A source said that to begin with, the national transporter will offer two "slabs" of subsidy surrender — 50% and 100% of the subsidy amount.

As of now, the state-run transporter bears 43% of the cost of all rail fares even as it incurs a loss of about Rs 30,000 crore every year in subsidising passenger fares.

The 'Give-It-Up' option will be available for tickets booked online or bought from counters. In order to make passengers aware of the subsidy burden on the fare, the railways had started printing — "Indian Railways recovers only 57% of cost of travel on an average" — on computerised tickets although the current accounting system does not give the exact cost.

Faced with the huge subsidy burden on the passenger segment, the railways has introduced dynamic fared in elite trains like Rajdhani and Shatabdi. As per rough estimates, the cost of a 3AC ticket from New Delhi to Mumbai on a superfast train, say the Golden Temple Express, for a passenger who wants to give up subsidy, will be Rs 2,750 instead of the Rs 1,570 that he pays now. The cost in 2AC by the same train will be around Rs 3,990 instead of Rs 2,275.

As the railways is in the process of overhauling its accounting system, it plans to introduce the scheme in all trains in a phased manner.

The biggest drain on the railways exchequer is subsidy on suburban travel segment. Suburban passengers pay only 36% of the ticket cost, while the remaining amount is subsidised, which is much cheaper than comparable bus fares.