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Explained: The real story behind railway passenger fare hike

india Updated: Jun 21, 2014 19:05 IST
HT Correspondent
HT Correspondent
Hindustan Times
Railway fare hike


Less than a month before he presents his maiden budget in Parliament, why did railways minister DV Sadananda Gowda go for hiking passenger and freight charges?

The answer to this is contained in the interim rail budget presented this March by his predecessor M Mallikarjun Kharge.

Calculating this fiscal's earnings targets for the public transporter, Kharge had factored in a hike of 14.2 % in passenger fares and an increase of 6.5% in freight charges in his interim budget this March.

For political concerns of imposing the tough decision in the run-up to the general elections, the United Progressive Alliance (UPA) government had not implemented the decision.

Read:Govt announces steep hike of 14.2% in railway passenger fare

During Pawan Kumar Bansal's stint in the ministry, the railways had taken a policy decision to charge the Fuel Adjustment Component (FAC) twice a year. The hike indicated by Kharge in his budget speech was due in April this year.

Unable to implement the decision because of the election code of conduct, the Railway Board notified the decision on the day of the announcement of the election results on May 16.

The notification was promptly withdrawn the same day after a few hours, reportedly because Kharge - who asserted that he continued to be the railways minister on that date - put his foot down.

"I was forced to implement the order that was done by my predecessor. Meeting the annual expenses would not have been possible without implementing the revised fare and freight structure finalised by the previous UPA government. I have only withdrawn the withholding order on the notification of May 16," railways minister Sadananda Gowda said.

Interim railway budget coverage