Acche Din A Gaye ?
With the steepest railway fare hike @ 14.2%, along with 6.5% hike on freight tariffs, ever in the history of Indian Railways, the government is defending its stand although a day before they were trying to pass the buck on the previous government saying that the decision was taken by them thereby forcing the BJP government to comply with the decision. Taking a U-turn from the previous day and amid criticism from political parties, the government defended the increase in passengers fares, arguing the revision was long overdue as the last hike took place 11 years ago and a heavy subsidy burden was unsustainable in the wake of soaring costs.
It is a fact that the cash-strapped railways is reeling under severe financial crunch. Railways need Rs.4.5 lakh crore to complete ongoing projects which are stuck because of a shortfall in revenue generation through internal resources. With the railways revenue not keeping up with projections and the transporters facing a drop in passenger numbers, the BJP-led government had to bite the bullet. The government is also pushing the proposal to allow 100% foreign direct investment through the automatic route in various segments like rolling stocks and tracks for high-speed trains, station development and warehouses.
The move is also seen as being towards implementation of dynamic pricing, a mechanism which gives railways the autonomy to raise or lower fare and freight tariff depending on fluctuations in fuel costs.
As a matter of fact, the decision on these hikes was taken on February 10 by the UPA Government with the caveat that it would come into effect after the polls. Accordingly, the railways board notified the twin hikes on May 16 when the results of polls came. However, just hours later, with Congress suffering rout, the Railway Minister leaned on the railway board to withhold the hike.
The oppositions are crying foul with sparking protests across the country where police had to use water canon to disperse the mobs and lathi-charged at various railway tracks to drive away the opposition parties like left, SP and Congress. On the other hand, the new tariffs has brought good news for Airlines who are jubilant. The steep rail fare rise at a time when Budget carriers are offering discounted tickets every other day, has now made flying cheaper than swallowing along for travellers who latch on to airline offers. Airline insiders insists that if the aviation ministry can come up with low-cost airports unlike the expensive Taj Mahal style terminals in Delhi and Mumbai. the LCCs can make Railways fight for passengers.
It is generally believed that the hike in passenger fares and increase in freight tariff will take a dig in the common man but experts see limited impact on inflation rather insist that it will help in restoring the health of public finances. While price pressures have returned, particularly in food inflation, the increase in railways fares is unlikely to add to any severe pressure. Economists believe that the impact on public finances will ultimately help in the fight against inflation.
Let’s keep our fingers crossed and hope for the Acche Din.