When fares for all modes of public transport — buses, taxis, autorickshaws and airlines — have been going up in tandem with other costs, it seems unfair that ticket prices for passenger rail transport should not. So the railway fare hikes announced on January 10 by the railways minister, Pawan Kumar Bansal, is a logical outcome; it is unlikely that most passengers will grudge the fair increase, though representative organizations and political parties have condemned the announcement, saying it adds to the burden that ordinary people carry. That is nonsense; the train journey between New Delhi and Calcutta is 1,447 kilometres long, and at an increase of 2 paise a km, the fare increase is just Rs 29. It has been 17 years since a member of the Congress held the job of minister for railways, so the brickbats from political allies and Opposition on the railway fare hike are only to be expected. The announcement is also indicative of the newfound confidence and aggression of the minority Congress government in pushing through tough reforms, something it had not been able to do as long as its erstwhile coalition partners were unwilling. Timing it ahead of the railway budget presentation in late February, and at a time when public attention is focused on other issues, is a strategic political move.
The heaviest increase — of roughly 20 per cent — is on first-class travel by air-conditioned coach. People who can afford to travel that way can surely afford the increase in basic fares, one that has been long overdue. The increase will add Rs 6,600 crore a year to railway revenues; for this financial year that ends in March, it will add an estimated Rs 1,200 crore. The proceeds from the fare increase will go towards better maintenance and safety; given the state of the fiscal balance, allocations for capital expenditure from the annual budget for 2013-14 are not likely to go up, making the fare increase inevitable. It is also natural to compare the surprise railway fare hike with the proposed gradual hike in diesel prices that is currently under consideration. Most experts agree that increases in the price of public services should be in small steps rather than one big hike; applying that logic to the railway fare increase, however, when the per km increase is so small, makes it difficult. But the railways minister faces another, more immediate, task: to improve the quality of service that the railways provide passengers. That, more than anything else, would justify the fare hike.