Govt hikes railway fares by 14.2 pc, freight charges increased by 6.5

Discussion in 'Economy & Infrastructure' started by Ray, Jun 21, 2014.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    Govt hikes railway fares by 14.2 pc, freight charges increased by 6.5 pc

    Six days after Prime Minister Narendra Modi spoke in Goa on the need to take “tough decisions” to revive the economy, the government on Friday approved a steep hike in the train fares and freight rates. Effective from June 25, fares of all classes are set to rise by 14.2 per cent, while the freight rates will go up by 6.5 per cent.

    Railway Minister Sadananda Gowda had sought the approval of Modi to roll out the “unpopular move” barely a couple of weeks before the government’s first rail budget. Gowda had also made a case for the hike to Finance Minister Arun Jaitley earlier this week.
    As much as 4.2 per cent of the fare hike is on account of a variable Fuel Adjustment Component (FAC) approved in last year’s rail budget. The remaining 10 per cent is a flat hike across all classes. Similarly, freight rates will have a five per cent hike flat over and above a 1.4 per cent of the FAC.


    Railways had pressed Gowda to seek a subsidy from the government if it was “politically inconvenient” at present to give a green signal to the hike.

    It had become a political decision since the last government had prevented the proposal of this very hike to be rolled out on May 16, the day of the election results that brought in the regime change. But the problem before the railways was that the expected mop-up due from the hike — around Rs 10,000 crore — had already been factored into the interim rail budget passed in Parliament before elections.

    It was understood within the railways that the hike would be automatic, and that was why the decision to effect the hike was announced without asking Railway Minister Mallikarjun Kharge on May 16 and then quickly withdrawn hours later following Kharge’s objection.

    “I have merely withdrawn the earlier government’s decision to withhold the fare revision on May 16,” Gowda told The Indian Express when contacted. “I am ready to face the brickbats.”

    Railways’ subsidy to passenger operations has touched Rs 26,000 crore and its ordinary working expenses have been mounting on account of fuel bill and salary. The two take away almost Rs 70 of every Rs 100 earned by the national transporter.

    The opposition parties have slammed the move, saying it bypasses Parliament by not introducing the fare hike in the rail budget. The Congress tweeted a screenshot of a tweet by Modi, who as the Gujarat chief minister a year ago, had criticised the then Railway Minister Pawan Bansal’s decision to hike fares after 16 years before the rail budget. “Just before rail budget UPA has suddenly increased railway freight rates bypassing Parliament. Wrote to PM against this,” Modi had tweeted on March 7, 2013.

    “After coming into government, without taking Parliament into confidence and without bringing out a white paper… , they have gone ahead and increased rail tariffs by 14 per cent,” Congress leader Manish Tewari was quoted by PTI as saying.

    “Those who till yesterday were talking about ‘aam aadmi’ and how his concerns should be addressed, have now started doing the opposite by imposing as much burden as they can on the so-called ‘aam aadmi’ who voted them to power,” he said.

    The Left parties slammed the Prime Minister for his “reward” to the people. “We strongly condemn the unprecedented hike in railway fare. This is going to be a huge burden on the people at a time when they are already battling relentless price rise,” CPM Politburo member Brinda Karat said. “It is criminal. We demand its reversal.”

    Trinamool Congress spokesman Derek O’Brien said: “Is this a super rail budget before the rail budget? The common man is already burdened, now he will be over-burdened.”

    Govt hikes railway fares by 14.2 pc, freight charges increased by 6.5 pc | The Indian Express | Page 99
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Maybe the economist and financial gurus on DFI can comment on this and the effect it will have on the Indian economy and will it benefit the Indian public in the long run?

    Will this increase inflation?

    What will be the effect on this if FDI in Railways commences?
     
  4. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    it will definitely benefit economy of railway department cause railway department is in total loss.
    .
    Rail Budget 2013: Railways may suffer Rs 24,600 crore loss in 2012-13 - NDTV
    .
    this loss is touching 30000 crore....
    .
    it is not good to increase the rates of transport of good cause it increases price of markets and also causes damage to those who have no relation with railways and on other hands increase in rates of passenger only costs passenger who travels through it.
     
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  5. Illusive

    Illusive Senior Member Senior Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    1 thing will surely increase, ticket less travelling. Like modi said, bitter decisions have to be taken for the good in long run. But this is going to hurt a lot of people in Mumbai.

    I do support this decision but we want better services, the level of incompetence shown in railways is of gigantic proportions, which is why the situation is more worse than actually it should be.
     
  6. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    If the Railways do not raise rates, how will the losses be cut?

    The Govt (Finance Ministry) has indicated there inability to underwrite the Railways.

    To offset the burden, the Railways and the Govt must ensure better amenities for travellers. If travel becomes less arduous and instead become seamless and comfortable, many will overlook the burden of the higher cost in fare.

    One of the main reasons why people want to become Railway Ministers is because they can dish out employment without scrutiny. This has led to flab. The Railways must cut the flab and ruthlessly show the door to the inefficient and the crooked. A lean and trim Railway will ensure cost efficiency and not burden the country on an yearly basis with rise in fares and freight charges.

    To ensure that the Unions are not capable of holding the Railways to ransom, there should be more Railway TA units with personnel from all departments of the Railway so that the Govt can beat any strike.

    Labour Laws and Industrial Dispute laws also requires to be revisited and revamped.
     
    Last edited: Jun 21, 2014
  7. Voldemort

    Voldemort Senior Member Senior Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Good move, I will say. As pointed out earlier, Railways is suffering huge losses. Hope they come up with better service.
     
  8. abhi_the _gr8_maratha

    abhi_the _gr8_maratha Senior Member Senior Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    sir, I am saying the same...... Its good that they hike the prices otherwise railway economy would have collapsed but it good that those who use it should pay rather than those who doesn't use it.
     
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  9. Neil

    Neil Senior Member Senior Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Well according to traditions and socialist- by pumping extra monies into railways.

    Problem: Fiscal deficit is too high to ignore.And according to some experts : pumping more money into railways would have increased inflation than reducing it.

    and to people who are advocating for better services in railways: It is making loss not profit. It will at least take a few years to recover that loss and then may be, just may be worry about services.
     
    Last edited: Jun 21, 2014
  10. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Better service is sure possible even within the existing infrastructure.

    In the olden days, at major railways stations where the halt was longer, sweepers used to come and clean the compartment including the III class. Today, it is a rarity.

    Earlier in Durontos, in which I have travelled extensively, there was on board sweepers and the toilet and compartments were kept clean inspite of crude passengers with low hygiene. Now, I have to demand that the compartment and toilet be cleaned.

    During the infamous Emergency days, there was definitely a great improvement in the cleanliness and punctuality. If it could done then, it can be done now too.

    Railway stations are filthy. Yet, I was pleasantly surprised to see mechanical means being used to clean the platforms in Howrah Station at regular intervals wherein there was definitely a lot of improvement. I also saw at many stations the cleaning staff using the water hoses to clean the muck (sh1t) on the railways lines This should be done in all railway stations.

    Then there are railway lines like Naini to Gwalior, there is no way you can get a meal. It is like a forgotten world! There are not even vendors on the sleepy railway stations where the trains stop. Maybe catering is a non profitable proposition on these lines. But what could be done is that passengers can be told to put in their meal orders (there being such information given by the coach attendant as to what is available on order) on boarding and the same is delivered at the appropriate time (the meal having been brought on board at the last 'profitable' railway station (in this case Allahabad), warmed at the appropriate time and given to the passengers who have ordered.

    Most of the trains are unwashed externally and they look dirty even at the starting station. In fact, at CST Mumbai I was shocked to see the luxury train that foreigners use to see the South, the Deccan Odessy or whatver it is called, totally filthy externally. Hardly what I would call Atithi Devo Bhavah .

    I have discussed this with the Railways authorities and while they say they have the latest in washing facilities for the rakes, it is not done due to the Unions and the proverbial lazy Indian worker mindset.

    Instead of coolies, there should be trolleys. Howrah has such facilities, but then the coolie union tries its best to sabotage the same. I will be frank, the trolley are more efficient and I sure hate to load a man with heavy luggage that I myself would not like to carry on my own (and even on my head).

    I could go on.
     
    Last edited: Jun 21, 2014
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  11. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    @pmaitra

    Since you are a railway 'brat', would you like to throw some light?

    Surprising you have not bunged in your 'chirp' (that is better than a 'tweet' and more exhaustive).
     
    Last edited by a moderator: May 10, 2015
  12. Neil

    Neil Senior Member Senior Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    @Ray sir: absolutely sir... but my argument was for at least a year or so.. u cant expect a major change since the loss is massive. And hopefully after it starts making profit or at least on no loss no profit basis the political brass doesnt reduce the price.
     
  13. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    I am with you.

    But even these 'cosmetic changes', if that could be called so though I think that they are what all wants, will surely give the feeling that the 'extra' being demanded by this fare hike is not all totally wasted and mere lip service.

    Every pice of a person's earning is through is sweat and blood

    And so, People want their money's worth.
     
  14. pmaitra

    pmaitra Moderator Moderator

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  15. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Your comment on improvement of services and given the manner in which employment is given to serve political purposes, surely things can improve if this manpower is fruitfully used.

    Mamata B and others enrolled their workers as sinecures.
     
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  16. tarunraju

    tarunraju Moderator Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Lots of comments on the Internet saying the government should have raised non-AC sleeper's fares by a single-digit percentage, while keeping double-digit hikes for AC classes. Those people are such idiots.

    In a typical 24-coach superfast express, count the number of 1A, 2A, and 3A coaches in comparison to SL (non-AC sleeper). You'll find that SL's make up 75 to 80 percent (if not more) of the consist. The idea behind this hike is the make sure SL pays 14.2 percent more. If you hike upper classes 14.2 percent, and keep SL's hike lower, it wouldn't raise nearly as much money for the railways, as an across-the-board hike would. The only other alternative would have been to hike SL by say 5 to 10 percent, while compensating for that with 70 to 90 percent hikes for 3A, 2A, and 1A. That's just how the math would play out. If 3A, 2A, and 1A get such hikes, then people would rather fly low-cost or take SL, than take those classes, and the objective behind this hike would be defeated.

    The target here is not the hike itself, but how much money the government wants to raise with it.

    I'll take this hike over disintegration and privatisation of Indian Railways any day. If railways falls in the hands of Reliance, TATAs, etc., then they'll govern fares like airlines do, and the hikes will always be double-digit, with little government say on the matter.
     
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  17. dealwithit

    dealwithit Regular Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    I support the govt action ... Indian Railways are the one the cheaper way of transport in the world..

    And we wish to have cleaner railway stations. cleaner rail compartments.. and we expect service should be Great..

    If ask more definitely there will be hike in the price.........
     
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  18. Abhijat

    Abhijat Regular Member

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    @Ray Sir , It will also lead to upgrade it's image as a profitable venture , so that investments particularly FDI can be attracted. What we need urgently is freight up-gradation. Government needs to do it's part of providing a separate freight corridor and private players are willing to invest in warehousing and other such basic amenities.

    It also shows that government can bite the bullet, so when the question of investment for bullet train would come up , foreign sovereign investor won't hesitate to invest in such large projects , as they know that they would successfully make profit from it.
     
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  19. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    The Govt should cut down on silly trains the successive brainless wonders of Railway Ministers introduced for their vote banks. These trains take up rail space, slows down movement and makes a mess of the timetables.

    The trains should be on the rosters based on a scientific model taking into account the statistic of the load along that route.

    Whistle stops that are a drain on the Railway Budget and are not efficient should be removed.

    Since there is a clamour for low fares, have more Garib Raths on the old fare structure, but add no facilities.

    Make other trains classy with whole lot of amenities with the new fares.

    Slowly people will realise the principle of money's worth and abandon ideas of travelling with low fares and no or little amenities.
     
  20. Singh

    Singh Phat Cat Administrator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    I would've preferred if freight hike wouldn't have been imposed and instead passenger fare subsidies would've been slashed.


    Sent from my iPhone using Tapatalk
     
  21. Ray

    Ray The Chairman Defence Professionals Moderator

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    Re: Govt hikes railway fares by 14.2 pc, freight charges increased by

    Freight hike today and dedicated corridor for freight traffic tomorrow.

    Makes sense.

    Business makes massive losses with the indeterminate arrival of goods on a very highly competitive market that is pushed on the consumer to bear in most cases.
     

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