Former Railway Minister Lalu Prasad Yadav may have walked away with accolades for effecting cuts in passenger fares, even if they had strings attached, during his five-year term, but the Railway Ministry is now feeling the heat, losing as much as Rs 3,000 crore of revenue annually because of the fare-cuts that happened during his regime.

“Railways is losing revenue to the tune of Rs 3,000 crore annually, courtesy all the fare-cuts made during the past five years,” ministry sources told The Indian Express. The quantum of the “losses” has all of a sudden assumed much significance, given the fact that the Railways is struggling to meet its revenue generation target due to the ongoing economic slowdown. Insiders point out that the forthcoming Rail Budget on July 3 may not report high cash-surplus figures, as was the case with the previous Rail Budgets.

The fact that the Railways will have to shell out Rs 14,000 crore this year to meet the recommendations of the Sixth Pay Commission is not likely to help matters further. “There will be little to show in terms of cash surplus,” senior officials admit. Nevertheless, Railway Minister Mamata Banerjee is expected to go the politically correct way in doling out some reductions in fares here and there, which would further hit the revenues.

Lalu had made it a policy to announce “conditional” or “token” fare-cuts during his tenure. In 2008, he had announced a reduction of 7 per cent and 4 per cent, respectively in the AC 1 and AC 2 tier class fares. In 2007, he had announced 4 to 8 per cent reduction in fares for the newly designed high capacity AC 3 Tier and AC Chair Car coaches. Another 2 per cent cut was made on the fares for these high capacity coaches in 2008.

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