New Delhi: The Indian railways has come under fresh pressure to further hike passenger fares, at least in a small way, and revise freight rates in the wake of a virtual decontrol of diesel price, but whether rail minister P.K. Bansal bites the bullet in the budget on Tuesday remains to be seen.
Bansal is likely to announce a slew of passenger-friendly steps such as improvement in catering service, development of stations and launching of about 100 new trains in his maiden budget on Tuesday.
All attention will be, however, on passenger fares as Bansal had recently said the increase in diesel price following the fare hike has affected the additional revenue which the railways expected to mop up by Rs.3,300 crore. The railways had effected passenger fare hike across the board by 21% on 22 January, aiming to mop up an additional revenue of Rs.6,600 crore.
Bansal has had several rounds of discussions with Prime Minister Manmohan Singh, finance minister P. Chidambaram and the Planning Commission. He is also understood have discussed the possibility of a fare hike with Congress president Sonia Gandhi.
However, people aware of the issue said a section of the Congress is not inclined towards effecting another round of hike as the general election is near.
Analysts, however, say that given the railways’ financial condition, a carefully directed increase in fares may not affect the United Progressive Alliance government’s election prospects and could be considered.
R. Sivadasan, former financial commissioner, railway board, said, “ The ministry might be tempted to increase both passenger and freight rates. They have scope to target the upper class in the passenger segment to mop up some more revenue, which may not make a huge dent in their vote bank. It will be for the good of Indian Railways.”
The budget could also see some tinkering in freight rates despite resistance from the industry in the wake of slow economy growth.