FB   
 
Powered bysps
        Society for Policy Studies
 
 

 
Subsidising Delhi Metro will delay expansion of the network
Updated:Oct 11, 2017
 
Print
Share
  
increase Font size decrease Font size
 
Delhi metro rides became costlier from Tuesday after the Delhi Metro Rail Corporation (DMRC) board decided against rolling back the hike recommended by the Fare Fixation Committee (FFC). Fare-hike, especially of services like energy or public transport, often meets with stiff opposition from the political class. The DMRC board’s decision too has not gone down well with chief minister Arvind Kejriwal. He has called the move “anti-people” despite being aware that a fare hike had become a necessity in the wake of metro’s mounting operational cost.
 
The DMRC board must be applauded for standing its ground in the face of strong political pressure from the city government to reverse the hike. Ignoring the law --- Metro (Operations & Maintenance) Act, 2002 --- which makes it binding on the metro rail administration to accept the recommendations of the FFC, the Delhi transport minister threatened to revoke DMRC chief Mangu Singh’s appointment if the hike was not reversed.
 
Populism could hurt the Metro
 
Populism, however, well intentioned, should not come at the cost of hurting the efficiency of the city’s most popular mode of public transport. A roll back or deferment could earn political dividends for the AAP government but will be disastrous for Delhi metro’s financial health and operational performance. The last time metro fares were increased was in 2009. Since then electricity tariff has gone up by over 90%, accounting for almost 30% of DMRC’s total operating cost. In the last few years, the DMRC has written several times to the Delhi government and the Union housing and urban affairs ministry to increase the fares, citing the rising operating cost. In 2015-16, DMRC had suffered a net loss of Rs 708.5 crore. In January, Arvind Panagariya, former chairman of the federal think tank NITI Aayog had also flagged the issue when he wrote to the Prime Minister’s Office that at the current level the fares are “inadequate for the provision of high quality services and maintenance.”
 
What happens elsewhere?
 
Despite the hike, Delhi metro fares continue to be far lower compared to other international cities. The minimum fare in Delhi post revision is Rs 10 as against Rs 288 (4 pound) in London, Rs 35.51 (1 SGD) in Singapore and Rs 21 (2 Yuan) in Shanghai.
 
Building and running metro rail service is highly capital intensive. Periodic fare revision is a prerequisite for running it efficiently. Worldwide, passenger fares are the largest source of income for metro rail. In London Underground, for instance, the Mayor decides the fare and political interference is unheard of. In India, the FFC is an independent entity set up by the Centre as and when a metro rail corporation requests a fare hike. They are temporary in nature and has three members who are appointed by the Appointment Committee of the Cabinet.
 
Though under the statute FFCs are insulated from political interference, there have been instances where state governments have not accepted their recommendation. In Mumbai Line-1, the FFC’s recommendation was not accepted by the state government and challenged in the court. The case is yet to be disposed of.
 
Subsidy is not the answer
 
Subsidising a world-class service like the Delhi Metro will not only delay the expansion of the network in the city, it might also send it the way the other train/local services have gone in different cities in India.
 
Take the case of Delhi Transport Corporation (DTC), the operator of the public transport fleet of buses in the city. Low fares over the years have crippled the public transporter with its fleet now reduced to 3,944 as against the requirement of 5,500 buses. The Delhi government is giving grant-in-aid of Rs ,1600 crore every year to the DTC to keep it running.
 
 
 
 
 
Print
Share
  
increase Font size decrease Font size
 

Disclaimer: South Asia Monitor does not accept responsibility for the views or ideology expressed in any article, signed or unsigned, which appears on its site. What it does accept is responsibility for giving it a chance to appear and enter the public discourse.
Comments (Total Comments 0) Post Comments Post Comment
Review
 
 
 
 
spotlight image Minister of State (Independent Charge) for Housing and Urban Affairs, Hardeep Singh Puri, is a former top diplomat who retired as India's Permanent Representative at the United Nations. In his new political avatar, as an important minister in the government of Prime Minister Narendra Modi, Puri told INDIA REVIEW & ANALYSIS that
 
read-more
Chief of General Staff, United Kingdom, Gen Sir Nicholas Carter’s, visit to India in mid-February was covered by Defence Ministry releasing five photographs and not a word on his engagements/itinerary, writes Anil Bhat
 
read-more
Campus placement season is here and the news is that graduates from the top campuses in India, especially the IITs, have received six figure pay packets and job offers in the US. However, looking beyond the top 200 engineering schools in India, pay packets are not looking too promising. The reason is the emergence of new engineering sc
 
read-more
The largest military exercises in Southeast Asia concluded on February 23 in Thailand, after 11 days of drills, social and humanitarian projects and traditional jungle training. A total of 11,075 soldiers from 29 countries participated in the Cobra Gold 2018 training, held in eastern Thailand, reports Efe news.
 
read-more
Maldives President Abdulla Yameen “conveyed that mediation was not wanted at this stage” when UN Secretary-General Antonio Guterres spoke to him last week, Guterres's spokesperson Stephane Dujrric confirmed Thursday, writes Arul Louis
 
read-more
Srinivasan leaves his office in Bengaluru where the lights and air-conditioners are switched off when sensors planted inside notice that he is leaving. He is prompted on his e-watch as to how much time it would take for the elevator to arrive on his floor, based on movement-recognition, writes Rajendra Shende
 
read-more

The Indian government is undertaking a project to enhance and install infrastructures related to trade and customs along its northeastern frontier, that include trading points with Bhutan.

 
read-more

Society for Policy Studies in association with India Habitat Centre held a lecture in the “China's Belt and Road Initiative: Nature, Implications and India's Response”

 
read-more
Column-image

What is history? How does a land become a homeland? How are cultural identities formed? The Making of Early Kashmir explores these questions in relation to the birth of Kashmir and the discursive and material practices that shaped it up to the ...

 
Column-image

A group of teenagers in a Karachi high school puts on a production of Arthur Miller’s The Crucible— and one goes missing. The incident sets off ripples through their already fraught education in lust and witches, and over the years ...

 
Column-image

Title: Do We Not Bleed?: Reflections of a 21-st Century Pakistani; Author: Mehr Tarar; Publisher: Aleph Book Company; Pages: 240; Price: Rs 599

 
Column-image

From antiquity, the Muslim faith has been plagued by the portrayal of Muslim men regularly misusing this perceived “right” to divorce their wives instantly by simply uttering “talaq” thrice.

 
Column-image

'Another South Asia!' edited by Dev Nath Pathak makes a critical engagement with the questions about South Asia: What is South Asia? How can one pin down the idea of regionalism in South Asia wherein inter-state relations are often char...