2. 'Rail fare hike to hit the
• The price of train tickets had not been
increased for a decade said Railways
minister Pawan Kumar Bansal. He further
said that there will be no increase in the
Railways Budget this year.
• Railway had incurred a loss of Rs 22,000
crore in the passenger segment in 2012, an
increase of deficit of Rs 4000 crore from the
• The shortage of funds has forced railways to
curtail allocations for majority of projects.
• The minister said that the hike was
"imperative" to maintain and improve the
safety measures and cleanliness of the trains
as well as upgrade railway stations.
4. ‘Train fare hike a stab in
• A few months ago, the railways started
levying service tax on tickets of AC
• The increase ranges from 2 paise per
km for Second Class Ordinary
(suburban) to 10 paise per km for AC
• The hike in Sleeper Class: 6 paise while
in AC Chair Car: 10 paise. AC 3-Tier
hike is 10 paise. First Class increase is
03 paise. AC 2-Tier has gone up 06
paise and AC First Class by 10 paise.
• Passenger fares hiked across the board
for the first time in 10 years with effect
from midnight of 21 Jan 2012.
7. Brace for higher fuel bills
• Diesel is the main fuel for transportation
and farming sectors
• Any increase in the fuel's price has a
cascading effect on the cost of daily living.
• For diesel, the options are to raise the price
by Rs 1.50 per litre plus taxes every month
between January and March. Thereafter, it
could be raised by Re 1 plus taxes every
month till its pump price equals market rate.
The alternative, or a politically more
workable proposal, suggests raising the
price by 60 paise per litre every month till
the gap between subsidized and market
prices are wiped out.
8. DIESEL PRICE HIKE
States Price Price
Delhi 41.32 47.15
Mumbai 46.25 53.14
Kolkata 44.76 50.98
Chennai 43.91 50.13
9. Diesel price on the rise
• A sharp rise in its price can shock the
economy and stoke public anger.
• That's why the government may opt for the
soft option of a partial float by setting a
fixed subsidy say Rs 5 a litre. Under this
system, the fuel's pump price would be
raised if the market rate rises beyond the
10. Hike in price of non-
subsidised cooking gas
• Cooking Gas have direct relation to the last
household of the country. Thus any increase
in the price of this commodities directly
affects the life of ordinary people.
• Cooking gas directly raise the price of meal
resulting in more problems for the society
already grappling with price rise and poverty.
• Cooking gas price rise also hamper
Government’s plan to promote the use of
clean fuels for cooking in rural areas since
people would not prefer costly cooking gas to
other cheaper domestic alternatives (i.e.
woods and uplas).
11. Subsidised Prices in Non - Subsidised Prices in
States Metros (Rs./14.2 kg Metros (Rs./14.2 kg
Delhi 410.50 895.50
Kolkata 412.50 925.00
Mumbai 435.00 906.50
Chennai 398.00 890.00
13. Some Relief to the
• The government is likely to raise the cap on
subsidised cooking gas for households to nine
from six cylinders per year, Petroleum Minister
M. Veerappa Moily.
• Government has introduced LPG portability for
cooking gas. With this customers will be able
to change cooking gas sellers and dealers
online and switch from one distributor or
company from a click of a button.
• This has been done to provide
customers, greater choice to select their
distributor and also bring competition
amongst the distributors. LPG portability is
being launched as a pilot in Chandigarh from
• It will be expanded to 25 more districts in
14. How it is affecting the business ?
For every Business to function/operate, there are certain inputs
(workers, staff, material, etc) which a business needs to bear.
• With increase in the prices of basic goods (transportation, gas, oil, etc) the business has
to incur huge expenses as the employees will demand more money and they also have
to spend more to get there inputs (raw-material, machine, etc).
• With the increase in salaries and inputs the business will get an output. Since the cost
price is more the business will want to increase there price as they would want to keep
the current profit rate.
Thus there is a problem….
15. Solutions Effect Results
Have a mass job cut It will reduce the cost price • Dissatisfaction among workers
to some extent. • May result in decrease in
Reduce the profit % It would make the • Dissatisfaction among
employees happy investor/shareholder
• May stop investing in the
Increase the price It would make the • Consumer might not want to
employees and spend more as there expenses
shareholders happy have also increased
• Consumer might find it very
expensive. Thus, Sales might
fall, resulting in lesser profit
• As per the survey conducted most people suggested
that a huge amount should be spend on improving
the infrastructure, better utilization of resources
which might help in bringing down the price of
producing that product or providing that services.
But there are limitations also…
Does the company have sufficient fund to make
Will all the members agree to that proposal.
Even after spending, will it bring in desired profit.