This August, railway passengers will have the option to give up their travel subsidy just like people gave up their LPG subsidy, an unnamed railway officer told Business Standard.

The railways currently bears 43% of the cost of all rail fares and recovers only 57% of the cost of travel on each ticket | Source: Reuters

In order to reduce the subsidy burden of over Rs 30,000 crore annually, the Indian Railways intends to start an LPG-like "Give it up" campaign to encourage passengers to voluntarily opt out of the subsidy on train tickets from next month.

Previously, a similar "Give it up" campaign launched by the Petroleum Ministry resulted in about 10.5 million LPG consuming households voluntarily opting out of the subsidy. This helped the government save over Rs 4,000 crore.

"The scheme will be launched from August. Through this, the passengers will have the option to forego either 100 per cent of the subsidy or 50 per cent or to avail the subsidy. It will be a voluntary decision that we leave to the customers," the official told the newspaper.

According to reports, the railways currently bears 43% of the cost of all rail fares and recovers only 57% of the cost of travel on each ticket.

It was reported that in 2015-16, though the railways' revenue amounted to about Rs 1.7 lakh crore, the passenger contribution only came down to Rs 44,000 crore. Close to 50% of the revenue is generated from reserved air-conditioned coaches, whereas the remaining comes from non-AC reserved and non-reserved categories.

Close to 50% of the revenue is generated from reserved air-conditioned coaches | Source: PTI

Has this case prompted the railways to take the step?

Last month, a passenger sent the Indian Railways a cheque of Rs 950 to make up for the subsidy enjoyed by him.

In order to reduce the subsidy burden of over Rs 30,000 crore annually, the Indian railways intends to start a similar "Give it up" campaign | Source: IANS

He took this step after reading a printed message on his e-ticket that stated that "Indian Railways recovers only 57 per cent of cost of travel on an average". The Indian Railways started printing this message from June 22 last year to make passengers aware of the subsidy burden on the fare.

(Feature image source: PTI)