Even if you don't like a corporates decision to increase the price, you have liberty to choose an cheaper one, here you don't have a choice and everyone just has an opinion justifying.
Well, you really need to take Econ 101. There is something called "switching". Buses and planes compete with rail for passengers and trucks and waterways for freight. BTW, the low cost airlines came and hurt IR in the top end 1AC, 2nd AC segment and puts an upper limit on how much you can raise fares there. For eg, I cant imagine too many people taking GT/TN express from Chennai to Delhi like 25/30 years ago and fighting over 1st AC, esp if the fare difference between that and and airplane is less than Rs 500 . Bottomline, this cross subsidy business will not work, unless the bulk of the train is A/C and the fares are reasonable and one or two coaches unreserved and two coaches "sleeper" . The current scheme in a 30 rake train with 3 A/C coaches and some 27 "subsidized coaches", cant work. 3 coaches cannot subsidize 27 coaches packed to the rafters.
Also, since the train fares have been kept so low, there has been a move AWAY from even state transport buses into trains. I noticed this at the railway station here in Bangalore. You would expect the BLR-Mysore passenger train at around 6;00 pm or so to run decently full, but not packed like sardines. Same I noticed in Thanjavur-Chennai, where historically in TN, you could ALWAYS sit and travel in peace in any train, including local passengers.
Now because of the Lalloo, Mamata "no price hike" for a decade, the railways are seriously under priced in comparison to state transport buses and lot of people who would in normal circumstances take the state transport corp bus (esp in TN kind of places), now take the train, hanging out of the footsteps and packed like sardines!
And now consider the other thing. A BLR-Chennai is now Rs 700 or so by Volvo. Recently, I heard of a "ultra luxury service" for Rs 1700 or so, where you get airline like treatment, seats, ambience, becomes a sleeperette, catered food etc and you reach chennai in roughly 5 hours. Now considering, the 2 hr drive to the airport, the 1 hr checkin , 1 hr flight and 1 hr drive from the airport to city in chennai, this will be ultra competitive with the airlines , esp as an early morning / late night service and far cheaper.
Nothing is a monopoly. There are alternatives and switches available and there is no case to persist in irrational pricing for railways.
The problem is that in Bengal and Bihar bulk of eastern India, a road transport system doesn't exist, and the switches are not possible. But in North, West and South, they do.
I do think it is time to break the monolithic Indian railways into 5 or six zonal corporations and operating companies, let them have their own fares, budgets, investment plans and capital spending and independent boards and cater to the regional needs, rather than an overcentralized and highly politicized monolith that is past it's glory days and is now an albatross.