With TMC exit, Chidambaram to increase AC rail fares by 3%

[Ray]

I understand what you're saying but such partiality towards AC class isn't right.

My dhobi got a shock of his life, as he narrated later to us, that while travelling in Sleeper (non AC) another chap came and told him to vacate since he was on that seat.

After much hassles, the TT came, checked the ticket and told my dhobi that he had been upgraded to Sleeper (AC) and he should go there!

He was totally delighted and when he came back, he told everyone his story and how great AC sleeper was.

 

[VIP]

My dhobi got a shock of his life, as he narrated later to us, that while travelling in Sleeper (non AC) another chap came and told him to vacate since he was on that seat.

After much hassles, the TT came, checked the ticket and told my dhobi that he had been upgraded to Sleeper (AC) and he should go there!

He was totally delighted and when he came back, he told everyone his story and how great AC sleeper was.

I usually travel in 3AC and sometimes in SL,too. And I find there's much difference and we rough and tough guys can handle SL easily.The big benefit is about class of people, as you've given example, you won't find such nonsense in 3AC,so a family man would always try to travel in 3AC.And if you increase the price of 3AC only, that burden can damage further.

 

[pmaitra]

I don't understand your question.

Increasing taxes doesn't help in fighting inflation, it only helps in fighting deficit, but at the same time, it can also decrease demand and thus revenue, and thus increasing the deficit instead of decreasing. In addition to that, it is also unpopular. Thats why increasing taxes is seldom used for fighting deficit.

Increasing taxes reduces the supply of currency in the economy, but the reserves that back this currency up remain constant; therefore, it helps reduce inflation. I am not saying it does not help fight deficit. I am saying it does help fight inflation.

You are right. The world over and also in India it is a proven fact that when the taxes are lowered, the total tax collection increases.

This reminds of JRD Tata, who in 70s when the peak tax rate was 97% had to sell some property every year to pay taxes. He never tried to evade taxes. It was such high tax rates that have lead to the present size of the parallel economy.

When taxes are lowered, people tend not to evade taxes, and therefore, I suppose, tax collection increases. However, that doesn't change the facts that (1) higher tax means more money back to government coffers, and (2) lowered taxes will not guarantee there will be no tax evasion. Lowered taxes also do not fight inflation, but help reduce chances of recession.

As long as there is paper currency, there will always be parallel economy. As long as this paper currency is issued by the government, the economy is not really parallel. This very term 'parallel economy' is a conundrum.

 

[parijataka]

I agree with Ray Sir, esp after sob's clarification that the increase in fare will not be used for IR but rather to stem govt's fiscal deficit. All of us pay taxes, whether income tax or sales tax on goods purchased or any other, but our hard earned rupee is being sqaundered by corrupt public servants and politicians. If increase in fares lead to better service then it is fine. TMC ex Railways Minister Dinesh Trivedi had drawn up a good plan for Railways overhaul with marginal increases across the spectrum - now that would have been of use to IR.

Central govt is using IR and Oil companies to mop up money to stem the deficit while it distributes freebies to garner votes and corrupt bureucrats and politicians bleed the system!

 

[pmaitra]

I agree with Ray Sir, esp after sob's clarification that the increase in fare will not be used for IR but rather to stem govt's fiscal deficit. All of us pay taxes, whether income tax or sales tax on goods purchased or any other, but our hard earned rupee is being sqaundered by corrupt public servants and politicians. If increase in fares lead to better service then it is fine. TMC ex Railways Minister Dinesh Trivedi had drawn up a good plan for Railways overhaul with marginal increases across the spectrum - now that would have been of use to IR.

Central govt is using IR and Oil companies to mop up money to stem the deficit while it distributes freebies to garner votes and corrupt bureucrats and politicians bleed the system!

Increase in fares will have to happen in stages, to be palatable to our public.

In the first stage, there cannot be, and I repeat, cannot be, any improvement in services. All the extra revenue will be consumed only with installation of safety instruments.

In the subsequent stages of fare hikes, you have to address selective discharge toilets, hire more employees* and man all the level crossings, and then finally, spend on increasing real estate and infrastructure.

* - You will hear many people say IR is overstaffed. They are - in a word - nuts!

 

[sob]

* - You will hear many people say IR is overstaffed. They are - in a word - nuts!

IR is overstaffed in terms of Babus. You have to visit the Zonal Railways offices to look at the mess. However at the operations level there is a shortage.

Outsourcing of catering is a good step, but needs to monitored carefully.

 

[Defcon 1]

Increasing taxes reduces the supply of currency in the economy, but the reserves that back this currency up remain constant; therefore, it helps reduce inflation. I am not saying it does not help fight deficit. I am saying it does help fight inflation.



When taxes are lowered, people tend not to evade taxes, and therefore, I suppose, tax collection increases. However, that doesn't change the facts that (1) higher tax means more money back to government coffers, and (2) lowered taxes will not guarantee there will be no tax evasion. Lowered taxes also do not fight inflation, but help reduce chances of recession.

As long as there is paper currency, there will always be parallel economy. As long as this paper currency is issued by the government, the economy is not really parallel. This very term 'parallel economy' is a conundrum.

That actually depends on which taxes are you talking about. Increase in taxes on goods such as excise duty, service tax, etc will increase inflation. The kind of tax you are talking about is income tax. Even if it is increased, it wouldn't make much difference.

 

[sob]

Okay the figures are out as per report on NDTV yesterday

1. Government will mop up Rs. 2400 Crores every year due to the Service Tax

2. IR fuel bill up Rs. 1500 Crores due to the Diesel Fuel price hike, and

3. IR loses Rs. 18,000 crores in transporting passengers.