New Delhi, March 14: Railway minister Dinesh Trivedi has raised ticket prices across the board, risking his chair by breaking with an eight-year tradition of holding down fares but working up the courage to shake off Mamata Banerjees shackles and embrace the pragmatism once associated with Manmohan Singh.
The minister said he had no option but to raise prices because of the financial quagmire the railways were stuck in and tried to soften the blow by announcing the fare increases paise-per-kilometre basis.
Passenger fares were raised by 2 paise per km for suburban and ordinary second class, and by 3 paise per km for second class travel on mail and express trains.
Ticket prices were increased by 5 paise per km for sleeper class, 10 paise per km for AC chair car, AC 3-tier and first class, 15 paise for AC 2- tier, and 30 paise per km for AC first class. For passengers from Calcutta, the maximum hike per trip for the highest class will work out to Rs 595. (See chart on Page 3)
I have been counselled to go in for a steep increase in passenger fares as there has been no increase for almost eight years. However, guided by an overriding concern for the aam aadmi, I have desisted from any steep increase, Trivedi told Parliament, virtually borrowing the Congresss theme song.
Later in the day, a delegation of Trinamul party colleagues met Trivedi to persuade him to back down. But he appeared to be holding firm.
Trivedi now risks losing his job and becoming a martyr at the crossroads of economic prudence, personal faith and political self-preservation through enslavement.
He said he had decided to bite the bullet and bring about a generational change in the way the railways had been run till date.
Explaining why he had taken such a bold move, Trivedi simply said: The railways was going into the ICU and I have pulled it out
. Everybody, including parliamentary committees, federations and passengers, were ready for a fare increase. Unless you have resources, you cannot undertake modernisation.
While his party slammed his budget, Trivedi won praise from Prime Minister Manmohan Singh who said the railway minister has presented a forward-looking budget with emphasis on safety and modernisation of the Indian Railways.
Finance minister Pranab Mukherjee, who has for long been advising Trivedis boss to raise taxes and charges in Bengal to bridge her states huge budget deficit, also said that if the railway ministers proposals were implemented, it will provide elbow room to the railways to build up capacity in various areas.
However, the fare hike masked the fact that the latest exercise would hit passengers in the lower classes harder when measured in percentage terms.
A quick back-of-the-envelope calculation showed that the fare hike on the Delhi-Howrah mail and express train routes ranged from 13.51 per cent in AC 3-tier to 14.54 per cent in AC 2-tier; 17.16 per cent in AC first class to 19.17 per cent in the sleeper class and all the way up to 21.5 per cent in second class evoking the shape of a damru used by a madari (the itinerant, cross-cultural equivalent of the monkeyman in Bob Dylans song who is always hard up for cash).
Platform ticket prices were raised from Rs 3 to Rs 5, a sharp and unprecedented 66 per cent increase.
But officials estimated the fare increase would swell the railways parlous coffers by just Rs 4,000 crore.
I had two very clear yet contrasting options either to keep the railways in status quo mode with just incremental annual changes or, as the phrase goes, bite the bullet, Trivedi said in his speech.
The second option would involve going for a generational change with a focus on safety and inclusive growth to meet the aspirations of this great country in the next decade. I chose generational change, he said in a speech that was littered with poetry and occasionally interrupted by jeers and laughter.
He said passenger traffic was expected to grow by 5.4 per cent, ratcheting up revenues by Rs 7,273 crore to Rs 36,073 crore in 2012-13.
Just days before presenting his maiden budget, the minister had raised freight rates by about 20 per cent that will raise well over Rs 10,000 crore. He also plans to dynamically link railway passenger fares and freight rates to fuel prices, by stating his intention to work out a proviso for a fuel adjustment component.
He expects the freight revenue to increase by Rs 20,719 crore in the fiscal 2012-13 to Rs 89,339 crore with the improvement in the economic situation.
But there are two big areas where Trivedi is looking to score over Mamata who handled the railways till last May. First, he expects to bring down the operating ratio how many paise the railways need to spend to earn Re 1 from 95 per cent in the revised estimates of 2011-12 to a 84.9 per cent in 2012-13. (The lower the ratio the larger the room for investments).
The best-ever operating ratio of Indian railways was 74.7 per cent in 1963-64
. I have no doubt that my operating ratio will improve upon even the best ever of 74.7 per cent within the 12th Plan, he said in his speech.
Trivedi is also hoping to close the year with a surplus of Rs 15,557 crore which is almost three times the Rs 5,248 crore that Mamata had envisaged in her budget last year. To make matters worse, Mamatas estimate was overblown and the railway budget shows a surplus of only Rs 1,492 crore in the revised estimates for 2011-12.
My focus will be safety, safety, safety, Trivedi told the Lok Sabha. This was the decision he had announced earlier too when he assumed charge of his ministry last year soon after a horrific train accident in Uttar Pradesh.
I vow to target zero deaths. I also propose to set up an independent railway safety authority, as recommended by an expert group headed by the former Atomic Energy Commission chairman Anil Kakodkar, he added.
The other four focus areas along with safety listed by the railway minister in his budget were consolidation, de-congestion and capacity augmentation of the network, modernisation and bringing down the operating ratio. He also laid stress on better hygiene and higher speed of trains.
Trivedi also proposed the highest-ever annual plan outlay for the railways at Rs 60,100 crore, of which Rs 15,000 crore would come from market borrowings, allocation of Rs 2,000 crore for the railway safety fund, internal resources of Rs 18,050 crore and gross budgetary support of Rs 24,000 crore.
The minister said he needs to modernise 19,000km of rail tracks which carries the bulk of freight and passenger traffic in the country. He said the 12th Plan envisages $1 trillion investment in the infrastructure sector, with half of it by the private sector and the other half by the government, pleading that at least 10 per cent of this should be invested in the railways.
I believe that railways, being a key transporter and infrastructure sector for the nation, must attract at least 10 per cent of the government share of investment that is about Rs 2.5 lakh crore during the 12th Five-Year Plan, Trivedi said.
The minister said that 725km of new lines will be completed this year. About 100 stations via the public-private partnership route have been planned over the next five years.
The railway budget placed in the Lok Sabha on Wednesday is no longer an individual minister's policy. It has become the property of Parliament. Even if a new railway minister is appointed, the person cannot simply do away with provisions that have upset Mamata Banerjee. Any change has to be proposed on the floor of the House and has to be passed when the budget in its entirety is passed. Usually, when proposals are rolled back (a familiar phenomenon in coalition politics), the government will announce the changes in the House and they are passed along with the main document.