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Rationalisation Of Both Freight And Passenger Fares

Rationalization Of Both Freight And Passenger Fares:

The Parliamentary Standing Committee on Railways has suggested rationalisation of both freight and passenger fares.

  • The losses incurred by the railways in passenger services purportedly due to the social service obligations which include pricing tickets at fares lower than costs and passenger concessions.
  • The railways incur losses to the tune of Rs. 35,000-38,000 crore a year in the passenger segment.
  • Revenues from passenger services further deteriorated due to the suspension of operations during Covid-19.
  • Operating Ratio: Noted the regular deterioration in Railways Operating Ratio (OR).
  • OR indicates how much the Railways spend to earn a rupee. It helps determine the financial health of the Railways.
    • For 2020-21, it is estimated to be 131.4%.
    • For 2021-22, Railways is targeting OR of 96.15%.