The Telegraph
Sunday , June 22 , 2014
CIMA Gallary

Jaitley backs rail fare hike

Jaitley: Stern step

New Delhi, June 21: Finance minister Arun Jaitley today said the steep hike in rail passenger fares and freight rates was a “difficult but correct decision”.

In a Facebook posting, titled “The Truth of Railway Fare Hike”, Jaitley said the railways could survive only if the users paid for getting the facilities. “India must decide whether it wants a world-class Railway or a ramshackled one,” he said.

“Passenger services have been subsidised by freight traffic. In recent years, even freight fares have come under pressure,” the minister said in his first reaction to the 14.2-per-cent increase in passenger fares and the 6.5-per-cent hike in freight rates.

The cross-subsidy on passenger fares has touched Rs 26,000 crore. The operating ratio, a measure of expenses as a percentage of revenue, is seen deteriorating to 90.8 per cent in 2013-14 compared with a budgeted 87.8 per cent. The railways aims to improve this to 89.8 per cent in 2014-15.

Jaitley, who will present the Union budget next month, said a loss-making railway would provide below-par services and would eventually not have the resources to meet its expenditure.

Of the Rs 64,305-crore Plan outlay in the 2014-15 interim budget, government support was Rs 30,223 crore, 16 per cent more than the budget estimate for 2013-14.

According to Jaitley, the Railway Board had notified the hike in rates in May, which was subsequently scrapped by the UPA regime so that the onus is on the new government to implement it.

Jaitley said railway minister D.V. Sadananda Gowda had taken a challenging decision. “The choice before Gowda was to either allow the railways to bleed... or implement the decision which the UPA government took but did not have the courage to implement,” the minister said.