(Image source from: Why Modi's decision to hike railway fares and freight charges is wholly justified?})

Populism kills an economy and who knows it better than our popular Prime Minister Narendra Modi?

Chewing the "bitter pill" on Friday, Modi finally gave a nod to the decision to hike Indian Railways passenger fares and freight charges by 14.2 per cent and 6.2 percent respectively, for all classes and with effect from June 25.

While the hike in price is sure to usher in “achche din” for the railways, which is currently incurring a gargantuan loss of about Rs 900 crore per month in the passenger segment, the new decision is likely to get its coffers overflowing by a whopping Rs. 8,000 crore — quite a hefty sum to mend its creaky infrastructure, we assume. However, it's the passengers, the frequent railway pliers, who are to take the beating here.

That said, the decision to inflate the fares or not wasn't really a cakewalk for the Modi government. With inflation wolfing down our food plates and Iraq crisis set to send the crude oil prices skyrocketing, a tough economic decision could now easily turn the tables against Modi's populist government overnight. But Prime Minister Modi is resolved. He deems that tough governance is the need of the hour for the country and he will do everything in his might to ensure that.

The hike in railway fares comes at a time when India is reeling out of the murky shadows of the UPA government, plagued by scorching price rise, towering tariff hikes and irrepressible inflation.

However, there comes a time when the need to secure a country's future seems more important than earning public kudos. And Modi seems to be doing exactly that, knowing well that his decisions might not go down well with many.

So, in a masterstroke, Modi government declared the hike, exactly two weeks ahead of its first Railways Budget, to exclude the price rise from the Budget and pan the political hue and cry.

Considering the new rates, a passenger traveling in Rajdhani Express IInd AC from Delhi to Chennai will now have to pay Rs 500 more. Similarly, travel between Kolkata and Delhi will get steeper by another Rs 400 for Rajdhani IInd AC passengers.

For all those who didn't know, Indian Railways has the highest freight rates in the world to cross-subsidise heavy losses incurred in carrying passengers at fares that are among the lowest in the world. This was the populist policy that previous governments heavily betted on. However, with Modi at the helm of things now and resolved to make changes, it's about time that the populist policy be reversed.

Those belittling the Modi government for this hapless hike, know that the decision to inccrease fares and freight rates was actually taken by the UPA government on May 16, but held in abeyance considering that the election results were just a day away.

Railway Minister Sadananda Gowda said, "I was forced to implement the order that was done by my predecessor. I am only withdrawing the withholding order."

“Meeting the annual expenditure would not be possible unless the revised rates as finalized by previous government are implemented, hence order of withdrawing implementation of revised fare and freight has been withdrawn," the railway ministry said in a statement.

While a flat 10 per cent hike was announced across all classes by the UPA government, an additional 4.2 per cent increase comes under fuel adjustment component (FAC)-linked revision scheme.

Things have now come to a full circle with Modi government steaming ahead on course correction that will let the Indian Railways, nation's lifeline, move ahead in full throttle and “achche din” will usher in.

AW: Suchorita Choudhury