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2 pm Jan 10, 2013

Is the steep hike in rail fare justified?

Is the steep hike in rail fare justified? Talk to Dr Raghuram who can give you the big picture.
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17 questions answered | 8 questions pending
  • What is the bigger picture? Asked by: Vishnu
  • G Raghuram Too open ended!!
  • One issue that ever persists with indian railways in maintenance across the board (AC,general compartment etc). Do you think the a percentage of the increased revenue be used to address this, atleast making the hike justified to some extent? Asked by: Naveen Kumar J
  • G Raghuram Yes, possibly. There are other priorities too, like safety and security.
  • Sir, don't you think that the Railway Minister is fully justified for the hike in view of the fact that there was no hike in passenger fares in the past ten years? Otherwise, what is the way out to reduce th ever incresing losses of Indian Railways? Asked by: Shyam Vadalker
  • Sir,Hike is not a problem,but wat abt the security,service,freebies provided to politcian at cost of citizen & the loot which the politician do..It is more of mismanagment & accountablity Asked by: SANJAY
  • G Raghuram Sure, IR needs to review its priorities of spend. Safety and security needs more. Modern Signalling will help safety and capacity. Freebies to politicians is not so much of a cost, though could be inequitable. So also the free passes to IR staff themselves.
  • Do you think this decision to increase fare in reserved boogies will help the condition of general boogies too,as i feel general boogies are the most neglected, extremely overcrowded out of all these. Asked by: gauri shankar
  • G Raghuram I am not sure. But in general during maintenance, IR looks at it as a train set. So all coaches (reserved and unreserved/general)will get the same maintenance. However, there could be differences across train set.
  • is it justified? Asked by: Amit
  • What could be the reason? Asked by: S Anand
  • G Raghuram IR needs to mop up resources, and passenger fares have been relatively low.
  • When more than 60% of the population is in poverty is rail fare hike justified Asked by: Natraj
  • G Raghuram Demand needs to be balanced through price, unless an explicit social benefit is considered. Then the 'owner' of that segment should subsidise, not IR.
  • Fuel Price hike, Rail fare hike, Is this right Economics? When it will end? Asked by: Ravi P
  • G Raghuram Price need to be better balanced. In that sense, passenger fares need to go up.
  • The Hike may have happened after 10 years, so may be justified. But the facilities leave a lot to be desired. Even trains like Rajdhani(Specifically Del-Chennai) are really bad. What should be the way forward in this regard Asked by: Narayan
  • G Raghuram Get branded quality service providers for premier trains atleast.
  • Given the existing inflationary pressures, wont an increase in rail fare pushes prices of essential commodities upward? While I understand the need for a hike, is it not ill-timed? Asked by: Mazin M C
  • G Raghuram Not really. Passenger hike is the significant one.
  • what impact it would have on financial markets? Asked by: Yasar Khan
  • G Raghuram Not much. There is hardly any connect.
  • The revenue generated by the recent hike in passenger fare is expected to cover only one fourth of the losses. Given the situation, the revenue from the freight sector is also declining and cross-subsidy not appears to be possible any more, is there a way out for Indian Railways? Asked by: M Sivagnanasundaram
  • G Raghuram Freight sector may not decline. Way out is to unlock value through PPPs in stations, manufacturing, services.
  • Last time the fare was planned to be hiked, the railway minister had to resign, there was a lot of protests, but the same does not seem to happen this time. So my question is why should the previous minister suffer for taking his stand and why not the current railway minister. Asked by: Rohit
  • G Raghuram Well coalition politics. As a country, we definitely need more political maturity.
  • If you look at the the announcement made by successive railway ministers, of making railways world class, i think they have failed. Amenities are pathetic, safety security are left to passengers themselves. Hence the hike seems unjustified, Asked by: S ESHWAR
  • G Raghuram Yes. But IR needs to bring in PPPs in their service side. In any case they need more money. And passenger fares needs to go up to get parity.
  • Dear Raghuram, Is this hike enough to pull out Railways from red. Asked by: Ganesh
  • G Raghuram Just barely for 2013-14 (about 6000 cr). Not sure about 2012-13 (1200 cr)
  • I think it is justified. No point in subsidising services like Rails when everything else is increasing. Why should the Indian railways offer subsidies to everybody when the per capita income is increasing? People should pay for what they use. Asked by: Karthik
  • G Raghuram Yes. Unless it is a subsidy for a considered social benefit, which also somebody should pay, not IR.

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G Raghuram
Professor, IIM-Ahmedabad