Railways hikes fares across the board from midnight January 21
Bansal said input costs have increased immensely over the years and the fares had remained stagnant or there was a little decrease in the lower class fares.
He said Railways was making efforts to raise revenues to meet urgent safety and user amenities requirements.
In addition, the Sixth Pay Commission meant an additional outgo of Rs 73,000 crore in the five year period and about one lakh crore till this time.
Bansal also said the freight traffic target could also not be met with the load showing a shortfall of 13 million tonne till December end.
He cross subsidy through freight business was no more viable in view of the fast evolving competition from other modes.
The across-the-board fare hike proposal of Dwivedi in the current year's budget was finally approved only for First Class, Second AC and First AC/ Executive Classes, which together constitute only about 0.3 per cent of total passengers and about 10 per cent of total earnings from passenger segment.
He said internal resource generation has been seriously impacted resulting in scaling down of Annual Plan size. Fund balances turned negative in 2011-12, adversely affecting essential replacement and renewal of assets, operation and maintenance activities and critical safety and passenger amenity works.
India moves to mend public finances, revive growth
(Reuters) The Indian government moved on Wednesday to mend its strained finances, which have hit capital investment and put its sovereign credit ratings in peril.
Prime Minister Manmohan Singh's government hiked railway passenger fares after a gap of nine years and later in the day sources in his government said it had proposed an increase in heavily subsidised fuel prices to rein in a swollen fiscal deficit.
The move signals Singh's intent to push ahead with politically unpalatable but vital reforms to revive an economy that is on track to post its worst growth rate in a decade.