Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
05 March, 2015 04:12 IST
Expert views on rail fare hike
Source: IRIS | 10 Jan, 2013, 01.44PM
Comments  |  Post Comment

Railway Minister Pawan Bansal on Wednesday announced hike in rail fares on Wednesday, which will be effective from Jan. 21, 2012. Sleeper class fare hiked by 6 paise per km while AC 1st and 3-Tier class fared raised to 10 paise per km. While ordinary non-suburban fare raised to 3 paise per km. Ordinary suburban fare hiked to 2 paise per km.

Commenting on the fare hike, Sonal Varma, economist, Nomura Financial Advisory and Securities said, "We see recent developments as an important signal from the government that consumers need to pay up. Over the past few years, consumers have remained immune from rising inflation as prices (of fuel, railway fares, fertilizer, electricity) have been kept artificially suppressed.

This kept inflation suppressed, fuelled consumption, and led to an unbalanced economy, with the burden of these imbalances falling on private investment. In this context, we see the recent move to hike passenger fares and discussion of higher diesel prices as a medium-term positive as it should help narrow the consumption-investment gap. Although in the short run, these measures will lead to high inflation (release of suppressed inflation), they should over time help ease some of the demand price pressures in the economy."

While Tirthankar Patnaik, Religare said, "We believe this is a step in the right direction and would provide some relief to railway finances. Moreover, it indicates the government's continued focus on fiscally prudent reforms, making the case for monetary easing stronger."

"The bold decision by Railway Minister to hike passenger rates by nearly 25% is a solid reform measure. The measure though has low revenue implication, but foretells the tough measures the Centre wants to implement to set right the fiscal deficit situation, which the rating agencies have warned to downgrade the sovereign ratings," Networth Stock Broking said.

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.

Comments Post comment 
 Post Comment
Name Email
Security Code type    into this box
Related Articles
Volvo sells 4.69% stake in Eicher Motors for Rs 19.2 bn - 04-Mar-2015 19:05
SKS Microfinance completes sixth securitization transaction of Rs 2.43 bn in FY15 - 04-Mar-2015 18:13
Crompton bags orders from Energy Efficiency Services - 04-Mar-2015 18:01
Yes Bank and UAE Exchange partner to integrate FLASHremit - 04-Mar-2015 16:35
Stempeutics receives US process patent for novel stem cell drug Stempeucel - 04-Mar-2015 16:24
RBI rate cut to bring down mortgage rates, secure more working capital: HDIL - 04-Mar-2015 15:22
Repo rate cut is a welcome step: Chanda Kochhar - 04-Mar-2015 15:16
Tirupati Industries to invest Rs 1.5 bn, become India's largest metallic compounds player - 04-Mar-2015 14:15
Bajaj Auto launches most fuel efficient bike - 04-Mar-2015 13:49
Bajaj Auto launches most fuel efficient bike - 04-Mar-2015 13:49
Mahindra Holidays expands geographic footprint in Madhya Pradesh - 04-Mar-2015 13:48
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer