Is the steep hike in rail fare justified? Professor G Raghuram shared his perspective in an interaction with IBNLive readers.
Q. 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
Is the steep hike in rail fare justified?
A. Yes... Unless it is a subsidy for a considered social benefit, which also somebody should pay, not IR.
Q. Dear Raghuram, Is this hike enough to pull out Railways from red. Asked by: Ganesh
A. Just barely for 2013-14 (about 6000 cr). Not sure about 2012-13 (1200 cr).
Q. 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
A. Yes. But IR needs to bring in PPPs on their service side. In any case they need more money. And passenger fares needs to go up to get parity.
Q. 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
A. Well coalition politics. As a country, we definitely need more political maturity.
Q. 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
A. Freight sector may not decline. Way out is to unlock value through PPPs in stations, manufacturing, services.
Q. What impact it would have on financial markets? Asked by: Yasar Khan
A. Not much. There is hardly any connect.
Q. 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
A. Not really. Passenger hike is the significant one.
Q. 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
A. Get branded quality service providers for premier trains atleast.
Q. Fuel Price hike, Rail fare hike, Is this right Economics? When it will end? Asked by: Ravi P
A. Price need to be better balanced. In that sense, passenger fares need to go up.
Q. When more than 60% of the population is in poverty is rail fare hike justified Asked by: Natraj
A. Demand needs to be balanced through price, unless an explicit social benefit is considered. Then the 'owner' of that segment should subsidise, not IR.
Q. What could be the reason? Asked by: S Anand
A. IR needs to mop up resources, and passenger fares have been relatively low.
Q. Is it justified? Asked by: Amit
Q. 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
A. 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.
Q. Sir, Hike is not a problem,but what about the security, service, freebies provided to politician at cost of citizen & the loot which the politician do..It is more of mismanagement & accountability. Asked by: SANJAY
A. 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.
Q. 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 the ever increasing losses of Indian Railways? Asked by: Shyam Vadalker
Q. 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
A. Yes, possibly. There are other priorities too, like safety and security.
Q. What is the bigger picture? Asked by: Vishnu
A. Too open ended!!