Of course the government could not gather courage to go in for passenger fare hike, except that, it is a very good Railway budget. No unaffordable populist measures have been announced. Need for capacity enhancement has been recognised, though investment streams being thought of are shaky. And at least in principle it has been accepted that there is need to separate politics and Railway.
Railway was being increasingly used as a vehicle to ride to electoral win. Of course it rarely worked that way, but politicians try to clutch at all the straws that come their way when it comes to winning elections. So the system was being choked by introduction of new trains every year, without making any meaningful investments to enhance the capacity. Whatever new lines used to be announced, they would be in the Minister’s constituency/state. In most cases, new lines thus constructed hardly carried any traffic, whereas many sections gasped for capacity, and in most cases accumulated maintenance arrears, as the maintenance margins were eaten into to run all those extra trains. This budget has made a complete break with this destructive trend.
A beginning has been made to make investment decisions rational. The sections choked with traffic have been identified so that the capacity enhancement works can be meaningfully targeted.
The independent authority to decide fares and freight rates should be made truly autonomous and powerful, so that fares can keep pace with input costs, without the government having to worry about negative press and attacks from the opposition. Mechanism should be put into place to revise fares every two month, so that passengers can accommodate to slight increase without much difficulty, and any decrease in input costs is passed on to them immediately.
The Railway minister has spoken on above lines, and the interview can be read here.