In some bad news for the passengers, Indian railways have made the decision to increase fare and freight tariff by about 2 percent, starting from next week. The latest decision has been made by the ministry in India in order to balance the financial burden coming from hiked input cost.


The ministry is aiming to collect at least Rs. 1,250 crore from the hike in the last six months of the current financial year, but the suburban and the non-suburban fares will stay the same. The decision to increase the fares once again has been made under the system of adjustment component (SAC) and the announcement about it was made in the rail budget for 2011-2012.

Railways has taken the burden of 7.3 percent increase in the prices of diesel and about 15 percent in electricity increase into consideration before it proposed the latest increase. The fares of AC and sleeper class will be hiked by 2 percent, while the freight rate will be increased by 1.7 percent. Moreover, the railways has also imposed a 15 percent levy due to busy season charge on all commodities as of October 1, 2013.

The FAC-linked amendment is most likely going to take effect as of October 10, 2013. The budget proposal has mentioned that the railways should revamp passenger fares every six months, considering the input costs and the current market conditions.

Photo Credits: The Hindu