Inevitable, says India Inc

Corporates and industry chambers, have said that the rail fare hike was inevitable given the rising fuel prices and inflation.

Venu Srinivasan, former CII President and Chairman and Managing Director, TVS Motor Co, felt that though the fare and freight hike was a bitter medicine, it must be viewed in a balanced manner. Three years of sustained high inflation combined with a periodic increase in diesel prices, had made such an increase inevitable.

“In a way, today’s decision was only a compensation for the last three years. It is a well thought through and moderated price increase. I don’t think it is excessive,” he said.

Srinivasan further said that the Budget exercise should also carry out further corrections in this direction to manage the Government’s finances in a responsible manner.

Chandrajit Banerjee Director-General of CII, said that railway freight rates have been increased with a view to resource mobilisation which is a critical requirement for the Indian Railways for modernisation, capacity addition and safety.

CII has urged the Government that FDI in Railways should be given a priority and resources can be mobilised through steps like inviting multilateral funding agencies to participate in railway projects and better utilisation of railway land among others.

“Tariff adjustments can contribute to resource mobilisation to a limited extent.

“While inevitable, the industry, currently reeling under a low growth scenario, can ill afford the freight increase especially on bulk heavy industries like steel, which contributes about 20 per cent of the freight revenue of Indian Railways and are already under stress,” the CII statement added.

Sidharth Birla President of FICCI, added, “If tariffs had been incrementally attended to over the years, to match rising expenditure and attending to the needs of this crucial link in our national infrastructure, an increase of this magnitude in one go would not have been necessitated.

“We of course hope and expect that there will be a concomitant improvement in both the quality and safety of services offered by Indian Railways.”