Build-up to budget

Fare hike ‘difficult but correct decision’, says finance minister

  • HT Correspondent, Hindustan Times, New Delhi
  • |
  • Updated: Jun 24, 2014 05:00 IST

Finance minister Arun Jaitley on Saturday said the government’s decision to increase rail fares was a “difficult but correct decision”.

“The passenger services have been subsidised by the freight traffic. In recent years, even freight fares have come under pressure,” he said in his first reaction to the 14.2% increase in passenger fares and 6.5% hike in freight rates.

Spelling out the choices in-front of the government, Jaitley said, “India must decide whether it wants a world-class railway or a ramshackled one…the only way that Railways can survive is when users pay for the facilities that they avail.”

Jaitley, who will present the budget in July, said a loss-making railway would provide below-par services and would eventually not even have the resources to meet its expenditure.

In a Facebook post titled ‘The truth of railway fare hike’, the minister said the decision to increase the rates was mooted by the railway board on February 5, when the United Progressive Alliance was in power. The board proposed a 5% increase in freight rates and a 10% increase in passenger fares but then Railway minister Mallikarjun Kharge developed cold feet, he added.

 

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