News Column

Jaitley says railway fare hike correct measure

June 23, 2014

Finance Minister Arun Jaitley on Saturday blamed the previous UPA government for the steep rise in railway fares and freight rates and defended the decision made by the NDA government, describing it as " a difficult but a correct measure". In recent years, even freight fares have come under pressure, he said on his Facebook page in his first reaction to the 14.2 per cent increase in passenger fares and 6.5 per cent hike in freight rates.

Stating that the choice before the government was to allow the railways to bleed and eventually walk into a debt trap or raise fares, Jaitley said, " India must decide whether it wants a world-class railway or a ramshackled one." " The Indian Railways for the last few years have been running at a loss. The only way that Railways can survive is when users pay for the facilities that they avail," he wrote in a long post titled The Truth of Railway Fare Hike'. Jaitley, who will present the Union budget next month, said a loss-making railways would provide below-par services and would eventually not even have the resources to meet its expenditure.

He argued the decision to increase the rates was mooted by the Railway Board on February 5, when the UPA was in power. " The board proposed a 5 per cent increase in freight rates and a 10 per cent increase in passenger fares. The proposal was to rationalise freight rates with effect from April 1 and passenger fares with effect from May 1," he said.

Even as the Interim Budget of the Railways was yet to come, the date May 1, 2014 was chosen in the hope that the general election would be over by that day. The railways had proposed that this increase would give it an additional revenue of Rs 7,900 crore.

" Armed with this decision, the then Railway Minister Shri Mallikarjuna Kharge met the then Prime Minister Shri Manmohan Singh on February 11, 2014. The then Prime Minister approved the hike and suggested that both freight and passenger fares should be implemented with effect from May 1, 2014 itself," Jaitley wrote.

He wrote that the Railway Board notified this increase on May 16, when the election results were declared. However, Jaitley added, Kharge developed cold feet and in the evening of May 16, after the UPA had been defeated, he countermanded the order so that theoretically the decision taken by him and the then Prime Minister would be implemented by the Railway Minister of the NDA government.

" The choice before (Railway Minister D V Sadananda) Gowda was whether to allow the Railways to bleed and eventually walk into a debt trap by following the policy of the UPA government or implement the decision which the UPA government had taken to increase the fares for both passenger and freight but did not have the courage to implement," he added.


The Vidhan Sabha road in Lucknow turned into a battle ground after workers of the SP and the BJP clashed with each other on Saturday evening.

A group of about 200 SP workers reached the BJP office to protest against the increased railway fares.

" The SP workers attacked our office around 4 p. m. following which our workers who were inside the compound retaliated. They (SP workers) threw bricks at our office and also burnt the effigy of PM Narendra Modi," BJP state president Laxmikant Bajpai told M AIL T ODAY over phone.

The BJP workers also burnt the effigy of CM Akhilesh Yadav.

" We have taken about 50 persons in our custody," inspector A. K. Verma of Hazratganj police station said.

Rajat Rai in Lucknow

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: Mail Today (India)

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters