Extended from:
A MORE ‘IN-BETWEEN-THE-LINES’ RAILWAY BUDGET – THE WAY TO A POPULIST UNION BUDGET? (I)
http://severallyalone.blogspot.in/2013/02/a-dampening-and-more-in-between-lines.html
Hiking passenger fares is a sensitive issue as it directly
affects the consumers and may invite negative sentiments from the lower income
groups – a gamble not to be taken in an election year.
The Indian politicians believe perceptions play a major
role in the electoral battles. But, what if it is a do-or-die situation for the
Indian Railways?
So, squeeze him out indirectly. Let him be in the
perception that the fares were not hiked again. As for the other price hikes,
the UPA government believes (wrongly) that it would be able to sail over the
troubled waters by launching its populist schemes.
By the time, the voter would come to realize these back-door
games, the elections would already be over.
The Railway Budget has increased the ticket prices
indirectly by increasing rates like reservation charges, Tatkal charges and
fuel surcharges. As expected, the ‘sleeper class’ has been given the least hike,
but the consumer here too, has been duped by the other indirect tariff hikes.
The real killer is the proposal to hike the freight charges as well
as its linking with the fuel and energy price variations. So, be ready to pay more each
time the diesel or power prices are raised.
Indian Railways, though has a relatively low share of
freight, i.e., 20 per cent, around 32 per cent of the Kerosene, diesel and LPG
is transported through the Railways.
As the fuel prices are now deregulated and market
controlled, expect more of regular periodic hikes in prices of fuels and so of
the dependent commodities, from foodgrains to consumer durables.
Periodic hike in the fuel prices would increase freight
charges increasing prices of the commodities being transported through the
Indian Railways. The increased rail freight rates would, in turn, further
increase the fuel prices. That would, indeed, be a vicious circle for
Manmohan’s ‘aam aadmi’.
But that is indirect and Mr. Bansal has followed one of
his predecessors Lalu Yadav, who did many such back-door things, like Tatkal
pricing or break-journey rules, to increase revenue figures, that ultimately,
squeezed out the common passenger.
What Mr. Bansal has done goes one step ahead. He has not
only squeezed the common passenger but has also pressed hard the common man, by
introducing the measures that would not only increase the ticket prices, but
would also cause price increases across the spectrum of commodities linked with
fuel prices and rail transportation.
So, the Indian Railways would be able to manage better and
the UPA government will have greater space to manipulate the resources towards
the schemes like the direct transfer of cash subsidy or food security or farm
debt waiver.