Tuesday, Sep 16, 2014

PM Narendra Modi’s first lesson: Easy to criticise price hikes, tough to not do them

Prime Minister Narendra Modi pushed up all passenger fares by 14.2 per cent and freight charges by 6.5 per cent effective from June 25. (Source: PTI) Prime Minister Narendra Modi pushed up all passenger fares by 14.2 per cent and freight charges by 6.5 per cent effective from June 25. (Source: PTI)
Written by Shivani Vig | New Delhi | Posted: July 2, 2014 11:00 am | Updated: July 2, 2014 8:23 pm

It was as if India was waiting for the BJP to come to power and bring prices under control. But Prime Minister Narendra Modi is yet to bring the ‘achhe din’ he promised by arresting spiralling prices. On the contrary, the grim realities of the economy seem to have forced him to hike fuel prices and train fares within the first month itself.

Incidentally, the BJP had in its manifesto underlined its promise of a price stabilisation fund to check inflation. But within weeks of coming to power, on June 16, the PM warned of “tough decisions” over the next couple of years to improve the country’s fiscal health. It seems Modi had finally realised that while it is easy to criticise the government for taking ‘hard decisions’, it was actually difficult not to take them while in power.

Here is a list of the “tough decisions” taken by the Modi government since May 26:

June 20: Rail fare hike

In what was the biggest hike in railway fares for decades, the Modi pushed up all passenger fares by 14.2 per cent and freight charges by 6.5 per cent effective from June 25. The Railways, however, clarified that 4.2 per cent of the fare hike was on account of a variable Fuel Adjustment Component (FAC) approved in last year’s rail budget, the remaining 10 per cent was a flat hike across all classes. But within days, giving in to the mounting pressure from ally Shiv Sena, the NDA government rolled back the fare hike for second class suburban trains.

The Railway Minister Sadananda Gowda defended the government’s measure of rail fare hike saying the decision had been taken by the previous regime as part of the interim rail budget, but its “implementation” was withheld till May 16.

Incidentally, in 2012, Modi had written a letter to then Prime Minister Manmohan Singh protesting the 20%  hike in rail freight rates. As Gujarat chief minister, he had not only protested against the rail fare hike, but also termed the move by the UPA government ‘anti-poor’ and ‘anti-farmer’.

The last rail fare hike took place in October 2013 when the passenger fares went up by two per cent and the freight charges increased by 1.7 per cent. Before this, railway minister Pawan Bansal had increased fares by 5-10% in June 2013.

June 23: Hike in sugar import duty

The Modi government announced that it will raise the import duty on sugar to 40 per cent from 15 per cent and will extend export subsidy continued…

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