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Rail fares may be hiked to pay for quake: PM

Prime Minister Atal Bihari Vajpayee said passenger rail fares may have to be raised in part because of pressure on government finances after last week's devastating earthquake.

"I feel a hike in fares would perhaps be inevitable," he told reporters on Wednesday night in the northern town of Lucknow which is also his parliamentary constituency.

The Railway Budget for 2001-2002 (April-March) is due to be unveiled in Parliament later this month.

Vajpayee said the quake in the western state of Gujarat, the second most industrialised state in the country, had come on top of a slowing economy.

He said on Tuesday the government would have to impose new taxes to meet the cost of rebuilding Gujarat where tens of thousands were made homeless by the quake.

The Gujarat state government says some 25,000 people died in the quake, while other estimates put the death toll at 50,000 or even higher.

A senior Gujarat official estimated said the quake may have caused damage of about Rs 100 billion.

Even before the quake, independent forecasters were predicting a slowdown in the Indian economy, one of the fastest growing over the past decade.

They saw it growing by 6 per cent in 2000-01 (April-March), down from 6.4 per cent and 6.6 per cent in the two preceding years.

The Complete Coverage | List of earthquake sites

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