Rail Fare Hike Justification

Fare hike: Years late, but Railways may need stronger reform shot-Indian Express 19th June 2014

Friday’s passenger fare hike is the steepest in the past 15 years. The last significant change in fares happened in the rail budget of 1999, when the NDA government came to power. The Railways have raised fares only thrice since then, of which one hike was reversed.

Over the same period, the wholesale price index rose by over 70 per cent. In 1999, Railway Minister Nitish Kumar kept second class fares unchanged but raised all higher class fares by 3 to 5 per cent. He again raised them marginally in 2002-03. But for the next 10 years, railway ministers Lalu Prasad and Mamata Banerjee allowed no increases.

Dinesh Trivedi of the Trinamool Congress raised fares by up to 30 paise per kilometre in rail budget 2012-13, a decision that cost him his job as railway minister. His successor was Mamata’s close aide Mukul Roy, who rolled back the hike.

Railway officials said Friday’s decision still falls short of the Railways’ requirement. To effectively target underrecoveries, fares should have been raised by almost 50 per cent, they said.

The officials, however, expressed hope that the Fuel Adjustment Charge (FAC) component introduced last year would allow them to change fares as international crude prices change, without having to make announcements. The Railways will spend about Rs 30,000 crore on fuel this year, against an estimated total traffic earnings of Rs 1,65,770 crore.

Former Railway Board chairman J P Batra said, “This is the steepest rise in passenger fares in more than a decade. In this fiscal this will give the railways an additional Rs 6,500 crore of revenue.”

http://indianexpress.com/article/india/india-others/years-late-but-railways-may-need-stronger-reform-shot-2/
Railway Budget: Dinesh Trivedi justifies fare hike-Rediff

Unfazed by the attack on him by his own party for raising rail fares, Railway Minister Dinesh Trivedi on Wednesday justified the move saying it was a "conscious decision" in the best interest of the Railways.
"No comments," he said when asked whether he would quit as Railway Minister as his party, Trinamool Congress, was demanding a rollback of the fare hike.

He said the party leadership was not aware of the provisions made in the Railway Budget.

"It is a very big misconception that the Railways is run from the Writer's Building (headquarters of West Bengal government). She (Banerjee) did not know anything at all and there was no interference by her in any aspect of the budget," Trivedi said in reply to a volley of questions after he presented his maiden rail budget in Parliament.

Asked about Trinamool Congress leader Sudip Bandopadhyay's demand for a rollback of the fare hike, he said "political parties have a right to their philosophy. There is nothing wrong in it.

"Whatever decisions we have taken are conscious decisions, which we have taken with full responsibility in the interests of the Indian Railways and the country."

He said Mamata Banerjee only spoke as Chief Minister of a state about projects relating to Bengal, like any other Chief Minister.

Trivedi parried a question whether he agreed with his party's policies, saying "I don't want to get into politics. This press conference is only about the railway budget".
Asked whether the hike was "necessary", he said "you also know whether it was necessary" and said that without raising resources, no modernisation or safety or other works could be carried out.

click to read opinion of Rail Minister Mr. Dinesh Trivedi