This refers to the editorial Untwisting tracks, a bit (FE, January 10). The decision of the government to hike railway passenger fares is welcome. Over a decade, price of everything has sky-rocketed but railway passenger fares were not increased because of the populist policy of railway ministers who were not willing to take unpopular decisions for resource generation while the much-needed railway reforms were put on the back-burner on the plea of resource-crunch. In the last budget, when then railway minister Dinesh Trivedi, belonging to the Trinamool Congress, proposed some hike in passenger fares, he was forced by Mamata Banerjee to resign by the same evening. His successor, another minister from TMC, rolled back most increases. Prime Minister Manmohan Singh took a wise decision in entrusting the railway ministry to a minister from the Congress party, Pawan Kumar Bansal. The government must firmly stand with its fare hike decision and focus on bringing railway reforms which are necessary for better passenger facilities and safety. A word of caution for the TV news channels, though. Instead of creating unnecessary hype and interviewing people critical of the decision, they must educate the people as to why the hike was unavoidable and how it will help railways in serving the passengers in a better way.
Interest on current account
The countrys largest lender, SBI, is understood to have recommended RBI that banks pay an interest on current accounts (SBI for 2% interest on current account, FE, January 9). One would recollect that SBI chief some time ago has initiated intense debate on payment of interests on CRR maintained by commercial banks with RBI as a part of statutory requirements. Today, in the context of changed milieu, the aspect of commercial viability has come into sharp focus and nothing is and can be offered for free. That is one side of it. From the viewpoint of customers, they are reasonable and entitled to receive interest on current account as well just like any other deposits maintained. After all, it forms a useful raw material for banks (at no cost) to keep the wheels of business cycle rolling. There is no reason why banks not pay interest on current account deposits. The proposal takes a balanced view and should be welcomed.
Srinivasan Umashankar, Nagpur