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Rail fares likely to increase as govt plans to levy safety cess

Indian Railways is likely to levy safety related cess on train tickets to fund the Rs 1.20 lakh crore safety fund- Rashtriya Rail Sanraksha Kosh, resulting in rise in train fares from April 1.

Railways is mulling increasing fares in a bid to raise resources after the Finance Ministry rejected its proposal of a special safety fund. According to the proposal, a safety cess will be levied to generate funds for strengthening track and upgrading signalling system and elimination of unmanned level crossings among other safety-related works to prevent mishaps.

The passenger fares for AC one-tier and two-tier may see just a mmarginal rise, but second class and AC three-tier passengers fares are expected to rise more because of a proportionately lower fare base. An announcement towards imposing a safety cess on train fares is expected in the budget for 2017-18, to be presented on February 1.

Railway Minister Suresh Prabhu had written a letter to Finance Minister Arun Jaitley seeking Rs 1,19,183 crore to create the special Rashtriya Rail Sanraksha Kosh for undertaking various safety works.

Since, the Finance Ministry has agreed to provide 25 percent of the Rashtriya Rail Sanraksha Kosh and is said to have asked the Railways to raise 75 percent of resources on its own by raising fares, Railways is left with no option but to raise passenger fares.

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