UPA factored in fare hike in interim Railway Budget, but did not say so in Parliament

‘The decision to not spell out the hike was a political one. Budget documents had all the calculations’ Arunendra Kumar, Chairman, Railway Board

Written by Avishek G Dastidar | New Delhi | Updated: June 22, 2014 10:53 am
Railways Minister Sadananda Gowda said, “I am merely implementing the decision taken by the previous government.” Railways Minister Sadananda Gowda said, “I am merely implementing the decision taken by the previous government.”

The UPA’s weakness on reforms is demonstrated in the manner in which it tried to effect the critical hike in railway fares: raising them by stealth without actually talking about it in Parliament.

On Friday, hours after the Narendra Modi government took the first of the “tough decisions” that the Prime Minister had spoken of earlier, Railways Minister Sadananda Gowda said, “I am merely implementing the decision taken by the previous government.”

Gowda’s predecessor Mallikarjun Kharge had built the anticipated mop-up from the raised fares into the interim budget accounting for this financial year. But he did not mention in his speech that the hikes would come in a few months, and that the political green signal for the reform had already been received.

“The decision to not spell out the hike was a political one. Budget documents tabled in Parliament had all the  calculations mentioned in them,” Arunendra Kumar, Chairman, Railway Board, told The Sunday Express.

The Budget’s Statement of Revenue Receipts and Expenditure shows that for 2014-15, the Railways projected earnings of Rs 1,60,775 crore, which was Rs 20,000 crore more than last fiscal’s estimates.

From carrying passengers alone, it projected an earning of around Rs 8,000 crore more than the last fiscal, to reach a figure of Rs 45,255 crore, despite falling short of last Budget’s estimates by Rs 4,700 crore in the financial year ended March 31, 2014.

According to the Railway Board, Friday’s 14.2 per cent increase in passenger fares, along with the 6.5 per cent increase in freight rates, is expected to generate an extra Rs 9,000-10,000 crore this financial year. This money is not over and above the budget estimates, but is a component of the estimates.

Notably, since last year, the number of passenger bookings has seen a decline, so in the absence of the real reason being spelt out, such projections were at that time described as “optimistic”.

In the evening of February 13, the day of the interim rail budget, asked about the “unusual” increase in its projections for the next fiscal, Railway Board chairman Arunendra Kumar had told The Indian Express: “We believe the economy to look up next year and business to pick up, going by trends of the last three months. The projections about earnings are hence the way they are.”

On Saturday, Kumar said, “Budget is prepared for the whole year. Everything is mentioned. The increase in earnings was factored into it when presented in Parliament, only the hike was to be implemented in May. Thanks to the Model Code of Conduct it could not be done before May 16. Around 4.2 per cent hike is a revision on account of a fuel adjustment component, which we have been carrying out since last year.”

Speaking to reporters on Saturday morning in Gulbarga, Kharge questioned the Modi government’s decision to “hike fares suddenly”, PTI reported. Kharge, who was in Telangana until late in the evening, could not be reached over the phone for a comment.

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  1. R
    Jun 22, 2014 at 1:14 am
    How come the previous Congress Govt included the revenues of Railway fare increase in the budget but didn't spell it out. This is clear case of cheating on the public.
  2. K
    Jun 23, 2014 at 6:59 am
    Where is the source of these numbers ?
  3. K
    Jun 24, 2014 at 10:45 am
    Who Rakesh Mittal ? seriously...:P
  4. T
    Jun 23, 2014 at 12:00 pm
    if BJP can rollback so many policies of Congress, then why cant the new railway minister rollback the proposed hike of rail fare ? It seems BJP is much worse than Congress and soon people will teach you lessons in coming embly elections to cut you guys in size.
  5. A
    Anil Gudhekar
    Jun 22, 2014 at 1:54 am
    Rly is one of the most currupt Dept thats why most wanted, so by avoiding this there is possibility to develop rly without hike in fare. & to respect Democracy & show BJP is differ than others ,they have to Hike in Parliament.
  6. S
    Jun 23, 2014 at 4:10 am
    Congress policies have made everyone a beggar. Literally and mentally. Literally Indians are poor. And mentally, by looking at the postings here, educated people are demanding that fares be rolled back, fully realizing that the budget would then be subsidized to the tune of Rs 10,000 crore by "others". Like a beggar, but demanding that they be given the money.
  7. S
    Santano Fernandes
    Jun 22, 2014 at 2:40 am
    For what reason you are elected, Don't talk like a child, you have to do your work and not carry bad what others were doing. These are all liars and will not be able to do anything simply ping the buck and showing others in poor light, The minister should remember that Indian citizens are educated and if he thinks that he is talking to illiterate people then he is wrong except the media who is just publishing and supporting wrong people and as Ex-Justice Katju said they are really the one,
  8. S
    Jun 23, 2014 at 10:22 am
    Central railway not in profit but in huge loss
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