Periodic fuel price-linked passenger fare hike to continue

Railways today made it clear that it would continue with the fuel adjustment component (FAC) to revise the passenger fares every six months.

After presenting his maiden Rail Budget, Railway Minister Sadananda Gowda told reporters, "We will continue with FAC which was there in 2013-14 also. There will be a periodic hike once in six months. That was taking place earlier also. This will continue."

Faced with major challenges like funds crunch and large number of incomplete projects, he said the government proposed to attract private and foreign investment to tide over the critical financial situation.

Justifying the FDI proposal, Gowda said, "We need huge investment for running bullet trains. There was a ban on FDI on Railways. Now we would request Commerce Ministry to delete that clause so that there can be FDI in infrastructure development."

FDI will not be allowed in core operational areas, he said, adding these areas will remain with the Railways.

On whether there will be any cap on FDI, Gowda said the Cabinet has to take a call and then "we will discuss it with the Prime Minister and Cabinet colleagues before taking a decision".

To a question on public-private partnership, he said the policies have to be changed. "Private players have no faith... They feel if you invest in Railways there will be no returns. We will have to change certain policies to attract private players."

Asked whether the government would set up the Rail Tariff Authority (RTA), the minister said, "We are looking at it and studying how it has to be done."

RTA was proposed in the Rail Budget by the erstwhile UPA government.