Bloomberg News

Indian Rail Minister Denies Being Asked to Resign Over Fares

March 15, 2012

Indian Railway Minister Dinesh Trivedi denied he had been asked to resign after a decision to raise passenger fares drew criticism from his own party and exposed the frailty of the governing coalition.

Contradicting statements made by lawmakers in his Trinamool Congress party and adding to a sense of administrative chaos, Trivedi said that neither Trinamool leader Mamata Banerjee nor Prime Minister Manmohan Singh had asked him to step down. Party legislator Suvendu Adhikari said Banerjee had sent Singh a letter yesterday asking for Trivedi to be removed.

Trivedi ran into criticism from party colleagues after he delivered his first railway budget to parliament yesterday, outlining plans to raise passenger fares on Asia’s oldest network for the first time in a decade to boost revenue and upgrade facilities.

“This is highly embarrassing for a government already in a very weak position,” said Samir Arora, founder of Singapore- based hedge fund Helios Capital Management Pte. “Trinamool is an utter nuisance to running a proper government.”

Trinamool, which took power in West Bengal state last year as it ended 34 years of communist rule, has 19 lawmakers in the lower house of India’s parliament, making it Singh’s largest partner in the ruling alliance. Congress was routed in local elections that ended this month, further weakening its clout with increasingly powerful regional allies and opponents.

‘Duty to Perform’

Finance Minister Pranab Mukherjee, who will present the annual budget to lawmakers tomorrow, backed Trivedi’s claims in parliament today saying no decision to replace the railway minister had been taken. Trivedi was sitting in the lower house as Mukherjee made the comments.

“I have a duty to perform to get the railway budget passed,” Trivedi told reporters today. “The moment my leader or the prime minister asks me to resign, I will resign.”

Trinamool lawmakers complained yesterday they were not consulted about the decision to raise passenger fares and do not support the plans.

“Our party is against the increase in passenger fares and we want a rollback,” Adhikari said. Derek O’Brien, a spokesman for Trinamool, did not respond to three calls to his cell phone. The NDTV 24x7 news channel said Trivedi was to be replaced by party colleague Mukul Roy.

Banerjee has emerged as Singh’s primary irritant, stalling his plans to bring foreign supermarket chains to India, as well as blocking passage of an anti-corruption law and proposals for a nationwide counter-terrorism center. Trinamool has cited reasons ranging from concerns over job losses to the rights of states under the constitution.

The government was forced to scrap plans to allow foreign retailers like Wal-Mart Stores Inc. (WMT) into India amid opposition from its allies, including Trinamool. Singh shelved proposals to allow foreign direct investment in pensions in December after Trinamool refused support.

Trivedi told reporters in New Delhi yesterday that he raised the fares in the interest of the railways and the country.

To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Andrew Macaskill in New Delhi at amacaskill@bloomberg.net

To contact the editors responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net; Hari Govind at hgovind@bloomberg.net


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