Fare hike necessary to save Indian Railways
The Union Government's decision to hike railway fares has expectedly led to loud protests from opposition parties across the country. Almost every major political outfit has lashed out at the BJP-led National Democratic Alliance for burdening the already beleaguered common man. They have taunted Prime Minister Narendra Modi for going back on his electoral promise of controlling inflation and ushering in acchey din (good times), while underlining how the hike will increase the cost of essential commodities. Typically, the Congress has been the most vocal in its criticism even though, as the Union Ministers for Railways and Finance, Messrs Arun Jaitley and Sadanand Gowda, have explained, the fare hike is technically a UPA regime decision that is being implemented by the NDA Government. In sharp contrast to all this politicking is the response of the general public, which seems to have accepted the price hike for what it is — a bitter pill necessary to cure a chronic illness. The people recognise that if Indian Railways has to become a reasonably good, let alone world-class, service provider, those who avail of its services will have to pay up. Effete politicians, however, would much rather continue pretending that the rail fare issue is a holy cow and meddling with it would be the equivalent of committing political suicide. This has two advantages. First, when the public demands better services, politicians can point them to the empty coffers and wash their hands off the matter. Second, when some politicians do take the initiative for reform, the rest of the lot can raise the bogey of anti-poor policies and score easy brownie points. Indeed, it was a combination of these two factors that had not allowed rail fares to be hiked for almost a decade — until they were finally revised in 2013.
Yet, even after fares were raised twice last year, Indian Railways’ losses are still estimated at about Rs900 crore every month in the passenger segment. The freight segment, which cross-subsidises passenger fares, may seem to help cushion against the financial impact but in the larger picture, the damage is done. Passengers save on low rail fares on one hand but bear the burden of higher freight costs on the other. Railways also loses about Rs30,000 crore annually and this figure will only rise, as fewer goods are transported on trains due to prohibitive costs. And then there is the qualitative damage that is being done — in the form of lives lost in train accidents due to abysmal safety conditions and the social and economic opportunities missed because of poor rail connectivity, not to mention the inconvenience caused to the tax-paying public in ramshackle coaches and at poorly maintained train stations.