India hikes rail fares

Fare rises will be unpopular among poorer travellers

The Indian Government has introduced marginal increases in the fares for passenger and goods trains, raising the cost of living for ordinary citizens.

This will affect the poor adversely.

Congress MP Renuka Chaudhry

The move was announced as part of a series of measures in the new rail budget presented to parliament on Tuesday.

India's Railway Minister Nitish Kumar told parliament that a slight increase of up to 10% in some passenger fares and freight rates would not have a major impact on the common man.

Left-wing parties have expressed concern at policies which could disadvantage ordinary people, but Mr Kumar justified the increase saying they would help improve services.

The rise is likely to prove unpopular among poorer travellers, especially on rural services.

Fares on faster inter-city service used by the more affluent middle classes were left untouched.

Additional revenue

Fare increases on India's railways, which carry about 12 million passengers a day, are considered politically sensitive.

But the government expects to earn additional revenue of more than $180m from the latest hike.

The rail minister said fare rises would help improve services

Aside from the fact that train travel is now slightly more expensive, the rise in freight rates on goods such as coal and edible oil will also push up the cost of living.

Fares on the super-fast services such as the Shatabdi and Rajdhani expresses were not raised.

The budget drew a mixed reaction from politicians.

Congress party MP Renuka Chaudhry said the modest hike was just an illusion.

"Let us see the reality. What it translates into ... will be something entirely different. This will affect the poor adversely," The Times of India quoted her as saying.

But coalition members of the ruling National Democratic Alliance (NDA) said the railways minister had done a good job of balancing resources.

The marginal increase in passenger fares would not exert a huge burden on common travellers, they said.

Safety measures

The government also announced a series of measures to give the railways a face-lift, saying it wanted to make trains competitive with air travel.

At least 25 new trains including 16 super fast trains will also be introduced.

Much of the rail minister's budget speech was devoted to underlining the importance of safety.

Mr Kumar said more than $3.5 billion would be generated in the next six years for measures aimed at minimizing train accidents.

They included developing anti-collision devices and safer and more comfortable carriages as well as replacing old tracks.

Debt trap

Fares remain heavily subsidised, but observers say the new rail budget favours reforms.

Fares remain heavily subsidised

India's railway network has been in a huge debt trap with its finance corporation borrowing at double-digit interest rates from the markets.

Critics have often blamed the poor finances on the populist policies pursued by the country's politicians for the last 50 years.

Heavy subsidies of passenger fares as well as the costs of maintaining the network's huge staff, estimated at more than 1.5m employees, have been blamed for the sector's financial mess.

Successive governments have shied away from drastic fare hikes that could dent their popularity.