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The Finance Minister Arun Jaitley has termed the Railway Ministry’s decision on fare and freight hike as “difficult but correct.”
On Friday, the Railway Ministry announced a 14.2 per cent across-the-board hike in passenger fares, while freight rates were hiked by 6.5 per cent. The new rates are inclusive of Fuel Adjustment Component or FAC, which is 4.2 per cent for the passenger fare and 1.5 per cent for freight rate. The new rates will be effective from June 25.
In his post titled, ‘The Truth of Railway Fare Hike’ on a social networking site, Jaitley said on February 5, the previous Government approved the proposal of the Railway Board regarding a 10 per cent increase in the passenger fare and a 5 per cent increase in freight rates. Originally, the revised freight rate was to be implemented from April 1 and the passenger fare from May 1. However, the then PM approved the hike and suggested that both freight and passenger fare should be implemented with effect from May 1, itself.
Jaitley further wrote that the Railway Board accordingly notified this increase on May 16, when the election results were being declared. This decision gave effect to what the Railway Board, the Rail Minister and the then Prime Minister had concurred. “The Railway Minister developed cold feet and on the evening of May 16th, 2014, even after the UPA was defeated in the elections, he countermanded the order of the Railway Board so that theoretically the decision taken by him and the then Prime Minister is implemented by the Railway Minister of the NDA Government,” the Finance Minister said.
He felt that by withdrawing the countermanding order, the present Railway Minister D.S. Sadananda Gowda has taken a challenging decision. “The choice before 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,” Jaitley said.
He also said a loss-making railway will provide below-par services. It will eventually not even have the resources to pay its bills. “India must decide whether it wants a world-class Railway or a ramshackled one,” he said.
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