Sources say a marginal 5 percent increase in freight fares is expected.
Reeling under severe financial crunch, the Railways board is learnt to have recommended a hike in rail fares.
The recommendation comes days ahead of the Budget, which is expected in the second week of July. However, Railway Minister Sadananda Gowda will meet Prime Minister Narendra Modi before taking a final call.
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According to sources, the Prime Minister is against a sharp rise in passenger rail fares. However, he has been apprised with the situation that a fare hike is an absolute necessity, said sources, adding that the board has recommended a marginal, up to 5 percent, hike in freight fares.
The UPA government had left passenger fares unchanged in the Interim Railway Budget in February ahead of the general elections.
Railways had announced hike on May 16 in both passenger fares and freight rates by 14.2 percent and 6.5 percent, respectively, from May 20. However, the decision was rolled back within hours leaving the job to the new government.
Cash-strapped Railways, which is losing Rs 30 crore a day, was hoping to garner Rs 8000 crore through the increase in passenger fares and freight charges last month. The cross-subsidy on passenger fares has touched Rs 26,000 crore.
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