If hikes essential, do in small doses

The across-the-board hike in railway fares was expected ever since Mamata Banerjee’s Trinamul Congress left the government, following which the railway ministry was handed to the Congress. The timing of Wednesday’s announcement has raised eyebrows given that the rail budget is just a month away.

It has naturally got the Opposition crying foul: they obviously suspect the government plans to present a populist rail budget with no increases in February. Railway fares have not been raised for the past 10 years; and with a `25,000-crore loss looming this year, railway minister Pawan Kumar Bansal had very little option but to raise fares. As he pointed out, all input costs had gone up; and freight charges are already so high that using road transport for distances below 750 km is said to be cheaper than sending goods by train. The railways’ share in goods transportation has thus come down significantly.
The fare hike, to be effective January 21, will net the government `6,600 crores for the entire year. Some calculations have shown that in certain categories, those travelling very long distances in second class will be paying proportionately more (40 per cent) than those travelling by AC first class. The increase in fares for AC first class is said to be less as their fares had been raised last year. The argument is questionable; as the rich and well-off can afford to pay more than the less well-off and economically weaker sections. It is misplaced concern to let them off specially when the railways face such huge losses.
The poor of course have the Garib Rath, but it is the less well off who have to travel long distances in search of jobs at construction sites, tea plantations and farms in the North, as their respective state governments have failed to provide them employment in their villages and towns. They are really refugees from the economic deprivation imposed on them by inefficient or uncaring governments. Besides, cross-subsidisation has always been the name of the game in India, so perhaps the government could think of making revisions in the hike, perhaps both downwards and upwards.
It will be pertinent to mention that the UPA government should stop playing politics with hikes. For instance, it has been talking of a possible diesel hike for months, even years, and when it finally runs out of time, it imposes a hefty hike in one go, giving all sections of the economy a major shock. There have been several suggestions that such hikes should be effected in small doses, so that the burden on people is less. The delay by the government comes at a huge cost to both daily wage-earners and the salaried classes.