NEW DELHI : Finance Minister Arun Jaitley on Saturday came out in strong defence of the steep hike in the rail fare and freight rates, asserting that a “difficult but correct” decision was necessary lest the very survival of the Railways becomes difficult.

In a Facebook post titled “The Truth of Railway Fare Hike,” he said: “The Indian Railways for the last few years have been running at a loss. The only way that Railways can survive is when users pay for the facilities that they avail….A loss-making railway will provide below par services. It will eventually not even have the resources to pay its bill.”

Jaitley explained how the UPA government developed cold feet after deciding to go for the increase as then Railway Minister Mallikarjuna Kharge countermanded it and it has now fallen on NDA Railway Minister D S Sadananda Gowda to take a challenging decision by withdrawing Kharge”s countermanding order.

Pointing out that the passenger services have been subsidised by the freight traffic but even the freight rates have come under pressure, Jaitley said: “The choice before Gowda was whether to allow the Railways to bleed and eventually walk into a debt trap by following the policy of the UPA Government or implement the decision which the UPA Government had taken to increase the fares for both passenger and freight but did not have the courage to implement.”

He then went on to recall how the Modi government has done nothing except to implement the decision taken by the Manmohan Singh Government. He pointed out that on February 5 when the UPA was still in power, the Railway Board had proposed a 5 per cent increase in the freight rates and 10 per cent in the passenger fares.

“The proposal was to rationalise the freight rates with effect from 1st April, 2014 and the passenger fares with effect from 1st May, 2014. Even as the Interim Budget of the Railways was yet to come, the date 1st May, 2014 was chosen, hoping that the general rlections would be over by that day.

“The Railways had proposed that this increase would give it an additional revenue of Rs 7900 crore. Armed with this decision, the then Railway Minister Kharge met then Prime Minister Manmohan Singh on 11th February, 2014. The then Prime Minister approved the hike and suggested that both freight and passenger fare should be implemented with effect from 1st May, 2014 itself.

“The Railway Board accordingly notified this increase on 16th May, 2014 when the election results were being declared. This decision gave effect to what the Railway Board, the Rail Minister and the then Prime Minister had concurred.

“The Railway Minister developed cold feet and in the evening of 16th May, 2014, even after the UPA had been defeated in the elections, he countermanded the order of the Railway Board so that theoretically the decision taken by him and the then Prime Minister is implemented by the Railway Minister of the NDA Government.”

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