Passenger fare increased by 14.2% and freight fares by 6.5%.

news Tuesday, April 07, 2015 - 05:30

The News Minute| June 20, 2014| 6.25 pm IST

The Government today increased rail passenger fares by a record 14.2 percent signalling firmly that the time for sops was over and done with.
The decision, a difficult one given India’s culture of doles and cuts, is the strongest indication to date that the government means business and is in business. The Congress, JDU, Left, SP and other parties have strongly opposed the move calling it anti-people.

The nearly 6.5  percent hike from existing freight fares has been largely welcomed by industry leaders and watchers who have urged Prime Minister Narendra Modi to bring the economy back on track with a firm and steady hand. 

The passenger fare, freight rate and freight structure rationalisation will come into effect from June 25, 2014.

Adi Godrej, Chairperson of the Godrej group told the media it was the right thing to do. The fare hike is expected to generate INR 8000 crores to the railways and a sector of the economy – infrastructure – strapped for cash. 

In the past few weeks, the government has hinted that tough decisions are on the way and Indians will have to bite the bullet if they wish to return to a high growth trajectory. 

India has the fourth longest railway network in the world – 65,000 kilometres – after the USA, Russia and China. Annually, the network carries some 8 billion passengers (the highest in the world) as well as 1.01 million tonnes of freight. 

Prime Minister Narendra Modi has said he attaches great importance to revamping and rehauling Indian railways that had fallen into disabuse and disrepute through neglect and corruption.

The Congress has however accused the Prime Minister of behaving differently while in opposition and in power. Congress spokesperson Ajay Maken in a press conference read out a letter sent by Narendra Modi in March 2012 opposing freight fare hikes.

The hike, announced by Union Railway Minister Sadanand Gowda, had already been readied by his predecessor Mallikrjun Kharge who was not able to present the budget as the previous government’s term ended in May 2014. The Railway Board had cleared the hike then and the hike was supposed to come in force from May 20, 2014. But the UPA II government had put the hikes on hold, saying it should be a decision that the next government in power should make.

The Japanese government which has participated in building the metro in New Delhi is expected to come in in the project to rebuild India’s railways as a backbone of the economy.

Show us some love! Support our journalism by becoming a TNM Member - Click here.