"The UPA government had left the railways bleeding. It is suffering a loss of Rs.900 crore every day and revenues are not available," Law and Justice Minister Prasad told CNN IBN television channel.
He said the decision was taken by the United Progressive Alliance government in the interim budget in February.
"It was a UPA decision made during the interim budget in February. But very intelligently, the UPA said it will be effective when the next government comes," said Prasad, who is also minister for communications and information technology.
He said if the railways have to survive, revenues are needed.
"This particular hike is designed to augment railways revenue, to improve their services. I do concede that a little sense of unease will be there in people but we will be able to make them understand," he said.
On the row over the government pushing for the use of Hindi in social forums, Prasad said the controversy was uncalled for.
"There has been a circular for the last so many years for the Hindi speaking states. It has only been reiterated. This controversy is uncalled for," Prasad said.
The minister assured that the government will allow governors to quit "gracefully", and noted that it was not the first time that governors have been asked to put in their papers after a change of guard at the centre.
"I have the highest regard for the office of governor... Many of the governors' terms are coming to an end in one or two months, but let me tell you that even if the governors exit, they will be allowed to exit gracefully," he said.
On the allegations of rape against Minister of State for Chemicals and Fertilizers Nihal Chand, Prasad said he was a victim of "political vendetta".
"Police under the erstwhile Ashok Gehlot government in Rajasthan had investigated the matter and had found no evidence against Nihal Chand. Now that he has become a minister, the Congress party is making politics out of it," he said.