New Delhi, June 20: Rail passenger fares were hiked by 14.2 per cent across the board and freight by 6.5 per cent, which would garner Rs 8,000 crore to the cash-strapped Indian Railways.
The new fares and freight charges would be effective from June 25. The revised fares will also apply to tickets issued in advance for journey to commence on or after June 25.
The move comes a week after Prime Minister Narendra Modi asked citizens to brace themselves for “tough decisions” to improve the financial health of the economy.
Officials said the basic passenger fare had been increased by 14.2 per cent and all other miscellaneous charges like reservation fee, superfast charge, catering charge and service tax, wherever applicable, may remain the same or go up marginally.
“I was forced to implement the order that was prepared by my predecessor. I am only withdrawing the withholding order,” railway minister Sadananda Gowda said, in a move to deflect the criticism from the Opposition UPA.
On the day the Lok Sabha election results were announced on May 16, railways had hiked the fares. However, the then railway minister, Mallikarjun Kharge, came out with a statement directing the Board to leave the decision on the hike to the new government.
The fare hike comes almost a fortnight before the railway budget, which is slated to be presented in Parliament in the second week of July. Two years, ago when the UPA government had announced a railway freight increase before the budget, Modi, then chief minister of Gujarat, had written to the then Prime Minister, Manmohan Singh, protesting the increase before tabling of the railway budget.
“When Parliament is going to meet in few days and almost a week is left to the railway budget, the Centre has taken this step, by-passing the Parliament, which is anti-poor and anti-farmer.”
Justifying the hike announced today, Gowda said: “Railways are incurring a loss of about Rs 900 crore per month in passenger segment. Meeting the annual expenditure would not be possible unless the revised rates as finalised by previous government is implemented, hence order of withdrawing implementation of revised fare and freight has been withdrawn.” The cross-subsidy on passenger fares has touched Rs 26,000 crore. Analysts said the 6.5 per cent freight increase was sure to raise prices of almost all goods - ranging from farm produce to minerals, steel and industrial products. Analysts however could not immediately come up with a figure on the inflationary impact.
Earlier this week, Gowda me finance minister Arun Jaitley to seek additional budgetary support for the national transporter to lessen the burden of passengers and reduce the cascading effect of freight hike on inflation.
He had reportedly discussed the fare hike with the finance minister and sought higher budgetary support. Industry seemed to support the price increase despite its impact on their costs. Sidharth Birla, president of Ficci, said: “If tariffs had been incrementally attended to over the years, to match rising expenditure and attending to the needs of this crucial link in our national infrastructure, an increase of this magnitude in one go would not have been necessitated.”
Meghalaya reaction: The Meghalaya Joint Council of Trade Unions & Associations today expressed strong resentment against the “anti-people” decision by the NDA government to hike railway fares.
The Centre had announced that the revised passenger fare and freight rates and freight structure rationalisation would come into effect from June 25. It had stated that meeting the annual expenditure would not be possible unless the revised rates as finalised by the previous government were implemented.
“We strongly oppose the abnormal hike in railway fares by the NDA government, and we demand a rollback of this anti-people decision,” council general secretary J.L. Das said.
He also said the council would discuss whether an agitation should be launched to oppose the hike.
The government had said that the railway passenger fare and freight rate revision was done as part of the interim budget presented by the previous government. However, the implementation of the revised rates was withdrawn because of the Lok Sabha polls.