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Jaitley defends rail fare hike amid protests by Opposition
Tribune News Service

New Delhi, June 21
The government decision to increase passenger services and freight rates has received widespread criticism from the Opposition parties and also from some NDA allies. Defending the decision, the ruling BJP today termed it a "difficult but correct decision" as the Railways can survive only if users pay for availing of the facilities.

In his first reaction on the decision, Finance Minister Arun Jaitley said the decision to hike rail fare and freight charges was ratified by the UPA government. As per his post titled "The Truth of Railway Fare Hike", the decision to increase the rates was mooted by the Railway Board on February 5, when the Manmohan Singh government was in power.

Jaitley maintained that the then Railway Minister, Mallikarjuna Kharge, and the then Prime Minister were in agreement over the hike in rail fares. "However, Kharge "countermanded" the decision on May 16, the day the Lok Sabha election results were announced, so "the decision taken by him and the then PM was implemented by the Railway Minister of the NDA government, said Jaitley.

Praising Railway Minister Sadanand Gowda for reversing the countermanded decision, he said the choice before the government was to allow the Railways to bleed and eventually walk into a debt trap or raise fares. “India must decide whether it wants a world-class railway or a ramshackled one,” he added.

The passenger services have been subsidised by the freight traffic. In recent years, even freight fares have come under pressure, added Jaitley. On February 5, when the UPA government was still in power, the Railway Board proposed 5 % increase in the freight rates and a 10% increase in the passenger fare.

"The proposal was to rationalise the freight rates with effect from April 1, 2014, and the passenger fares with effect from May 1, 2014. Even as the Interim Railway Budget was yet to come, the date —May 1, 2014 — was chosen hoping that the General Elections would be over by that day," said Jaitley.

The Railways had proposed that the increase would give it additional revenue of Rs 7,900 crore. Armed with this decision, Kharge met Manmohan Singh on February 11, who as per Jaitley, approved the hike and suggested that both freight and passenger fares be implemented with effect from May 1 itself.

Accordingly, the Railway Board notified this increase on May 16 when the results were being declared.

Actual hike 10%: Govt
The Railway Ministry on Saturday clarified the hike was inclusive of fuel adjustment component, done every six months. The order of fare and freight revision issued by the Ministry of Railways specifies 10% hike in passenger fare and 5% hike in freight charges

Allies seek rollback
The BJP's Tamil Nadu allies — DMDK and MDMK — have sought a rollback of the fare revision. CPM’s Politburo condemned the hike terming it a cruel blow to the working class. Trade union CITU has also condemned the steep hike