With ex-ally Trinamool Congress (TC) leaving the coalition the Government pushed through another move which the TC had previously opposed. A 3.7% tax on rail freight tariffs and higher passenger fares from 1 October are to be imposed, barely six months after the TC forced the rollback of the first increase in rail fares in eight years. The additional revenue will help rail infrastructure upgrades and contribute to reducing the Government's 2012/13 fiscal deficit forecast of 5.1% ( Rs 5.7 trillion or $ 108 bn) of GDP. Our forecast is about 6% of GDP. The rail fare increase is a further signal by PM Dr Singh's coalition that fiscal consolidation and economic reforms will continue after the recent most daring reforms since 2004 were announced in the last fortnight. To further ease the fiscal deficit the Government is looking to raise revenue through sales of state-run firms, an auction of cancelled second generation mobile phone licenses and more efficient tax collections. The new Finance Minister, Mr P. Chidambaram, is showing the coalition's earnest desire for fiscal consolidation and reforms to avoid a possible downgrade of India's investment grade status by international credit agencies.