Govt takes first ‘hard decision’; hikes railway fares

The government on Friday approved a steep hike in train fares and freight rates. The new rates will be applicable from June 25. While all classes of passengers fares will be increased by 14.2 per cent, freight rates will go up by 6.5 per cent. Though considered as “unpopular move”, the Modi government approved the Railway minister Sandanand Gowda move ahead of couple of weeks before the rail budget to be presented in Parliament. He said that the fare hike takes care of 4.2 per cent Fuel Adjustment Component (FAC) approved in the last year’s rail budget, and the remaining 10 per cent takes care of other costs. The railway ministry sought subsidy from the government, if the decision was politically inconvenient. Interestingly, the previous UPA government had factored in the hike, amounting to Rs 10,000 crore, in its interim budget passed in Parliament before elections.  “I have merely withdrawn the earlier government’s decision to withhold the fare revision on May 16,” Gowda told to reporters adding “I am ready to face the brickbats.”Railways’ subsidy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.