Mar 22, 2012 at 10:15pm IST

Mamata has her way, populism derails railways

New Delhi: Mamata Banerjee has had her way again and the passenger fare has been rolled back. The announcement was made by new Union Railway Minister Mukul Roy on Thursday. What happens to the railways now? Will the plans of modernisation of railways go off-track?

Dinesh Trivedi, the man who lost his job for not following the rope of 10 years of no fare hike still believes his budget was flawless.

"You need to modernise, for that you need resources. I would have presented the same budget," said Trivedi.

The view was, however, not echoed by his party.

But what does this partial roll back mean in terms of finances?

The railways had hoped to generate around Rs 5000 crore in the year 2012-13 but with the roll back in all segments except AC 1st class and two tier, railways would get just Rs 300-400 crore, thereby, losing Rs 4600 crore.

A basic estimate suggests railway incurs a loss of Rs 20000 crore on passenger services alone and Rs 800 crore is given by way of concessions.

In the age of coalition politics, the passenger fare segment has become a political hot potato. Though it is good economics but as we have seen in the recent past, good economics doesn't necessarily mean good politics.

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