July 7, 2014


Hundreds gather in New Delhi after government announced 14% increase in effort to get ailing service back on track

By Anu Anand
Commuters hang on the outside of a local train in Mumbai.
The rail network carries 23 million people every day.
Photograph: Rafiq Maqbool/AP
It is one of the world's oldest and busiest rail networks, carrying 23 million people on 12,000 trains every day, including students, rural labourers and middle-class workers. But a 14% rise in heavily subsidised passenger fares has sparked outrage across the country, leading to protests as the new government prepares to unveil its annual rail budget.
Hundreds of people gathered in New Delhi on Monday to protest against rising food, fuel and transport costs, including the rise in train ticket prices, disrupting the opening session of parliament. Freight has also been increased by 6.5%, making commodities such as cement, iron ore and coal more expensive.
India's finance minister, Arun Jaitley, defended the fare rise, citing a $5.5bn (£3bn) loss on passenger fares alone.
"If we didn't hike fares, the railways would have shut," Jaitley told India's lower house of parliament. "If you're using a service, you should pay for it."
India is the only country to have a separate budget for its railways, a provision dating to a 1924 precedent set by British colonial rulers. For decades, rail accounted for the majority of passenger and freight traffic.
But today, as India's government-owned rail network faces competition from better roads and a proliferation of airlines, it still employs 1.3 million people and runs rail catering services as well as schools and hospitals for its workers.
Tickets are discounted for passengers in 53 categories, including film technicians, members of St Johns Ambulance Brigades, research scholars, war widows, disabled people and senior citizens.
Chancellor, hoping to attract millions from Indian firms, says new PM has created 'real excitement' over hopes for reform

By Rowena Mason
George Osborne has praised the controversial new Indian prime minister Narendra Modi for creating a mood of change in India, as he landed in the country on a mission to strike a series of multimillion pound trade deals.
The chancellor and foreign secretary William Hague are the first senior British politicians due to meet Modi, the Hindu nationalist leader, since his landslide victory in May.
Speaking from Mumbai, Osborne said Modi's popularity showed the coalition had been right to re-establish contact with him in 2012. The last government broke off relations with the former mayor of Gujarat after he was accused in 2002 of allowing, or even encouraging, riots that killed 1,000 people, largely Muslims. A supreme court investigation found insufficient evidence to support the charges against Modi, who has always denied any wrongdoing.
The government wants British companies to do well out of Modi's promised construction boom, as the new prime minister has pledged to build 100 new cities, roads, railways and ports.
In a joint editorial in the Times of India, Hague and Osborne also said Britain wants to expand its military exports to the country. "We want our defence and aerospace companies to help bring India more cutting-edge technology, skills and jobs," they wrote.
Speaking on BBC Radio 4's Today programme, Osborne defended the UK's efforts to sell military equipment to Modi, saying India has "difficult neighbours" and has a right to defend itself.
The chancellor said it was "very early days" but he had wanted to meet Modi to say Britain and India "can do lots of good business together, that these good days are coming".
"We as a new British government took a decision in 2012 to re-establish contact with him," Osborne said. "That has been very sensible given all that has happened since, in the way Mr Modi has managed to win an outright majority for the first time in Indian politics for 30 years, to create a real sense of excitement in India that economic reform is possible and is going to happen."
Osborne said Modi had a better chance of achieving economic reform than some recent Indian governments because "he's got this enormous mandate for change, [and] in his election he appeals precisely to that young aspirational Indian who wanted to see more economic development in their country and get away from the subsidy culture which had bedevilled a lot of Indian politics."
Osborne compared the appeal of Modi to the coalition's own efforts to "make the world look at the UK in a new light".
The chancellor and foreign secretary will speak to business leaders in Mumbai about the prospects for the Indian economy since the new prime minister's election.
Ahead of the speeches, the two ministers will visit the car company Mahindra, which is investing £20m in an electric vehicles project at Farnham and Donington. They will also announce that Indian pharmaceutical company Cipla is to invest up to £100m in the UK.
After visiting Mumbai, Osborne and Hague will go to New Delhi to pay court to Modi, following recent visits by senior French and Russian ministers