Sep 8, 2016

Railway Minister recommends end to Social Subsidies

TRAIN passengers

New Delhi: Union Minister Suresh Prabhu proposed an end to railway subsidies to defence personnel, senior citizens and students. He said that these subsidies cost around Rs 30,000 crore and should be borne by the ministries concerned. The minister has also proposed doing away with separate railway budget. For this, he has written a letter to the finance minister.
However, the end of subsidies will not cause any increase in passenger fare or freight charges, said the ministry. “Such an increase is not possible. It will be counterproductive for Railways. The freight charges have reached a saturation point and high passenger fare will discourage higher passenger traffic,” said a railway official.

According to the ministry, the railways will earn from other sources. It says that development of stations in a commercial manner and advertisements on stations and trains can be two major sources of earnings.

The Railways has chalked out an ambitious plan of generating resources through TV screens at stations. Advertisements on these screens bring huge revenue, they claim.

The move of doing away with the subsidies is considered to be the part of implementation of Bibek Debroy Committee report. It has recommended wide-ranging reforms in the Railways and suggested its commercialisation.

It has asked the railways to get rid of social obligations and function like a commercial organisation. The committee has suggested that the Railways should not run hospitals and schools. It should also not do anything which can not make an earning.