Indian Railways considering imposing a two per cent safety cess on train tickets

Indian Railways considering imposing a two per cent safety cess on train tickets
New Delhi, May19:Plagued by repeated derailments, the Indian Railways is considering imposing a two per cent safety cess on train tickets. The funds will be utilised for strengthening accident prevention measures.

According to a Hindustan Times report, the cess could be fixed at about 2 per cent of the total fare amount.

Approximately 94 per cent of the passengers travel in the unreserved second class.

The state-run behemoth is reeling under mounting losses, a Rs 32,000-crore debt burden and galloping operating ratio, the calculation of paisa spent against every rupee earned.

According to the move, the Railways will have to generate additional revenue of Rs 5,000 crore in the current financial year (FY) as its contribution to the safety fund created in the budget.

Railway Minister Suresh Prabhu said, “We have to raise safety funds and the people will also have to give some support. We are considering all options.”

The government had announced the creation of a special safety fund of Rs 1 lakh crore over the next five years that will cover upgradation of tracks and signalling besides the elimination of unmanned level crossings.

The special safety fund envisages spending of Rs 20,000 crore on safety upgradation every year.

However, Railways has so far received Rs 15,000 crore — Rs 10,000 crore from the central road fund and Rs 5,000 crore from the Finance Ministry — while it has been asked to raise Rs 5,000 crore from its own resources for the Rashtriya Rail Sanraksha Kosh.

There are three ways to generate Rs 5,000 crore for the special safety fund, said a senior railway ministry official.

The first option is to raise the additional revenue through non-tariff resources. The second is through a hike in freight rate and the third option is through imposing safety cess on passenger fares.

However, the official said no decision has been taken yet on the issue, the official said.

There is a dire need of safety upgradation to prevent accidents which have seen a spurt in the recent past.

The Railways aim to eliminate all unmanned level crossings on the broad gauge network by 2020 for which massive expenditure is required.

A safety cess was last levied in 2002 during Nitish Kumar’s term as the railway minister to service a special fund of Rs 17,500 crore. The fund was set up to take up several tasks, including restoration of old bridges, besides signalling and track modernisation works.

“Volumes (in terms of revenue generation) can come only when fares of the unreserved class are hiked,” the official added.

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