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Raiway Budget 2012: Government caves in to Mamata Banerjee, rolls back rail fare hike
March, 23rd 2012

The government has capitulated to pressure from the Mamata Banerjee-led Trinamool Congress and rolled back most of the railway tariff hikes, besides abandoning key reform measures, announced by the ousted rail minister Dinesh Trivedi.

The new railway minister Mukul Roy told Parliament on Thursday that the hike in passenger fares for second-class suburban and non-suburban sleeper, AC chair car and AC threetier would remain unchanged. He, however, refrained from announcing any reduction in the 15 paise per km and 30 paise per km increase in AC two-tier and AC-1 fares respectively announced by Trivedi.

"The concern of the common man is overriding even if it means biting the bullet of a different kind. The impact of the fare hike on the aam admi was huge," Roy said while replying to the debate on the railway budget in the Lok Sabha. Banerjee had sought Trivedi's removal and a rollback of the fare hikes soon after the rail budget was presented on March 14.

The new minister used the parliamentary pulpit to defend his party's stand. The fare revision, the first in eight years, was seen as a much-needed step for improving the depleting finances of the railways. The new minister has also scrapped two reform-oriented decisions - setting up a committee to examine the need for an independent tariff regulatory authority and the proposal to expand the Railway Board.

The tariff authority was aimed at reducing political interference in determining fares. "All reform measures for modernising railways stand withdrawn. Roy virtually tore the 'pink book' (the document detailing railway finances) apart. This will only take the railways back to the stone age," said a leader of the Congress-led United Progressive Alliance.

Trivedi, who had kept his party on hold for days before giving in to demands for his resignation, said only time would tell who was right and who was wrong. "I am concerned about safety and you cannot have safety without modernisation and you cannot have modernisation without resources," he said.

CPM politburo member and Rajya Sabha member Sitaram Yechury said the railway minister's reply in Parliament laid bare the "irresponsible nature" of the ruling coalition.

"The minister announced the withdrawal of hike. He did not tell Parliament how he intends to meet the resource gap on account of this decision. There could be supplementary hikes during the year," said Yechury, whose party is Trinamool Congress' rival in West Bengal.

"Over the past few years, the government has been increasing freight rates and not touching the passenger fares. The government has further increased the freight rates by 22%-25% this time, thereby increasing the distortion and making freight rates among the highest in the world. This obviously impacts the price of finished goods in India. We are ultimately overpricing the goods in the world market," former Railway Board chairman JP Batra said.

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