The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Jagruti Jain, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
Railway Minister Suresh Prabhu faces a stiff dilemma on whether to raise fares and freight rates in his second Rail Budget on Thursday as railway finances come under tremendous strain. According to Mr. Suresh Prabhu, the resources of railways are constantly dwindling as they are not decided in the most optimum manner. The share of railways in freight as compared to the other modes of transportation is declining.
There should be a trade off to ensure that interests of the freight operators and passengers as well as that of railways is protected. The parameter on deciding the freight should be efficiency. He stressed on the need for private participation in railways. At the same time he does not want to affect the ineterest of the travelling public. But there’s a threat in involving the private companies, the fare may go up. But as the Diesel price nowadays are on declining mode, public will not accept the hike in the fare. Also this may affect the elections which are round the corner in four states, Kerala, Tamil Nadu, Assam and West Bengal.
However, railways have already decided to run as many special trains on higher fares in popular routes catering to the growing demand during festive season. Well this is an indirect way of hiking fares. Upgradation of existing coaches with modern facilities and improved interiors are being planned in a big way to run trains on higher fares like the recently launched Mahamana Express between New Delhi and Varanasi.