In one of the biggest hikes, which is dubbed as “anti-poor” by Opposition Congress, the cash-strapped railways on Friday raised passenger fares by 14.2% for all classes and increased freight rates by 6.5% to garner Rs 8000 crore annually through the pre-budget decision. The decision, which will come into force from June 25 and apply on basic fare, comes nearly a week after Prime Minister Narendra Modi said the country should be ready for “tough decisions”.
The decision marks the implementation of an announcement of May 16, the day Lok Labha election results came, when the hike was announced but put on hold immediately. In a flip-flop, the Ministry first announced that the hike will be implemented with immediate effect but later changed it to June 25, saying the officials needed time to execute it.
Announcing the decision, less than a month after the NDA government took over, Railway Minister Sadanand Gowda said, “I was forced to implement the order that was done by my predecessor. I am only withdrawing the withholding order.” He said the interim budget presented by the previous government had assumed certain revenues on the basis of the proposed hike that was announced on May 16.