Rail Budget 2012-13: Under fire, government backs off rail fare hikes

The government rolled back on Thursday some of the increases in rail fares that were announced last week after a rebellion within the ranks of the ruling coalition over the issue, which forced the resignation of the railways minister.

New Railways Minister Mukul Roy told parliament that fares for first and second class passengers in air-conditioned carriages would still go up, but there would be no increases for other classes of travel more commonly used by the poor.

"The proposal to increase (fares) will impact the common man," Roy said. "I intend to give relief by not increasing fares in any of these classes."

The proposed increase in passenger fares, the first in eight years, was aimed at shoring up the finances of a rail network whose dysfunction has become a major drag on the economy.

The objection to the increase, led by the Trinamool Congress, underscored the inability of the UPA government to take unpopular steps and its vulnerability in the face of querulous coalition allies.