DNA Editorial: Fair hike

The Centre’s resolve to rein in a monstrous fiscal deficit manifests yet again, and this time through the much-needed railway passenger fare hikes across all classes and distances. That the most popular mode of transport in India — with over two crore people travelling by trains every day — had been suffering staggering losses is common knowledge. But few railway ministers had the courage and the vision to overhaul the system and encourage profit generation. Most had exploited the Railways’ resources to provide sops to their support bases. Yet, last February, when Dinesh Trivedi, the TMC MP, proposed fare hikes, he had to face Mamata Banerjee’s wrath. It resulted in a partial roll-back, thus cutting off the scope for the Railways to earn about Rs 4,300 crore for the fiscal year. The freight rate hike of over 20 per cent managed in the process was barely a face-saver.

It took 10 years for the Centre to raise fares, and all this while an ailing Railways had been held hostage to coalition politics. Consider the figures: The passenger segment’s losses have mounted from Rs 6,159 crore in 2004-05 to about Rs 25,000 crore in the current fiscal, marking an annual 18% growth.

It didn’t matter to Banerjee or her predecessors that populist measures had significantly reduced the Railways’ efficiency, and even impacted its safety and security systems.
It’s true the increased fares will generate only a paltry amount when compared to the humongous losses, but it’s a step in the right direction. UPA II and Railway Minister Pawan Kumar Bansal may have to face a hostile opposition crying hoarse over this unpalatable move, and they should be prepared for it.