New Delhi: Train fares for passengers have been increased by 14% from Friday, while freight charges went up by 6.5%. Surprisingly, the moves come ahead of the Rail Budget 2014 to be presented by Railway Minister Sadananda Gowda next month.
The UPA government had left passenger fares unchanged in the interim railway budget in February ahead of the general elections, leaving the difficult job of managing the national transporter’s weak finances to the next government.
Currently, Railways are facing severe financial crunch with passenger subsidy touching Rs 26,000 crore. The national transporter needs a huge investment to upgrade its signalling system and strengthening the track to prevent accidents, but it doesn’t have enough money to do that. Railways minister Sadananda Gowda on Thursday said the government is short of resources and some resource mobilisation should be taken as a priority.
Modernisation and revamping of railways is the top infrastructure agenda of the government, which wants to build a Diamond Quadrilateral project of high-speed trains and a network of freight corridors over the next few years. These projects require very large capital investments.
Mr Gowda had earlier said the government is planning to allow foreign direct investment (FDI) into railways to finance its ambitious plans to modernise the sector. At present, there is a complete ban on any kind of FDI in railways except mass rapid transport systems.
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