With the maverick former Railway Minister Lalu Prasad gone, travelers should brace up for a possible rail fare hike. The Planning Commission has asked the Railways Ministry to raise passenger fares as well as freight rates to improve its revenues and profit margins and stop cross subsidisation.
“It is the Planning Commission's job to make such suggestions from time to time dispassionately. If it is in the good of the country, then it should be done, no matter the timing,” said Congress spokesperson Manish Tewari.
Unfazed by the stiff opposition from former Railway Minister Lalu Prasad, the Commission has yet again suggested setting up a Rail Tariff Regulator. Though industry experts are in favour of the Regulator, they say that fare hikes might not mean good economics or good politics.
Ahead of the Budget for 2010-11, the Plan panel is scouting for resources from within the government utilities and Indian Railways is one of the world's largest commercial utilities.
Given the current fiscal stress, the Commission thought it best to hike the rail fares and feel its coffers without further stressing the fiscal deficit. But given the political compulsions it will be interesting to watch the government do the balancing act between politics and economics.