House panel criticises Rly move to include surcharge in fares

The Indian Railways’ move to subsume a “safety surcharge” in the actual fare and utilise the subsequent revenue generated to fund the construction of the Dedicated Freight Corridor has drawn flak from the Parliamentary Standing Committee on Railways.

The Indian Railways’ move to subsume a “safety surcharge” in the actual fare and utilise the subsequent revenue generated to fund the construction of the Dedicated Freight Corridor has drawn flak from the Parliamentary Standing Committee on Railways.

As first reported by The Indian Express earlier this month, Rail Bhawan decided to subsume the safety surcharge in passenger fares “on an as is where is basis in the form of a development charge to fund the freight corridor”. The Railways also decided to include the receipts on this account in its passenger earnings starting April 1, 2007.

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Out of the total Rs 17,000 crore allocated for the Special Railway Safety Fund (SRSF), Railways had to mobilise Rs 5,000 crore by levying a safety surcharge on passenger fares.

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The SRSF was set up by the Centre in 2001 to wipe out arrears in renewal of over-aged assets like tracks, bridges, signalling gears and rolling stock within a fixed time frame of six years. Ever since, Indian Railways has been levying a surcharge between Re 1 and Rs 100 on passenger fares, depending upon the class and total distance traveled.

As the stipulated six years ended this March, the Railways would have had to discontinue levying the safety surcharge this year, which could have led to reduction in fares. Instead, by subsuming it into passenger fares in the form of a development charge, Rail Bhawan ensured that it continued to get the money (roughly Rs 850 crore annually) and also maintain the impression that no new levy had been imposed.

What the report says

Pointing out discrepancies in the figures of passenger traffic shown in the Railways’ Outcome Budget and the 10th Plan document, the Committee says the target of number of originating passengers in 2006-07 in the 10th Plan document was 5,885 million whereas the Outcome Budget portrays it as 5,686 million.

Calling the Railways “late” in submitting the draft plan for the 11th Five Year Plan to the Planning Commission, the Standing Committee says the Railway Ministry “should not be found wanting in this respect”. The Committee says despite the 11th Plan period commencing from April 1 this year, Railways is yet to finalise the physical targets for capacity augmentation in fixed infrastructure.