The Hindu Business Line : Railways hikes freight charges by 5-7%

New Delhi, June 26 In what could add further fuel to the inflationary fire, the Indian Railways is hiking freight charges for ores and minerals, petro-products, coke and coal, fertilisers, foodgrains and a host of other commodities by 5-7 per cent.

The rate hike, to be effective from July 1, will be on account of a ‘special supplementary charge’ that Railways has decided to levy for the first time under its dynamic pricing policy — apart from the ‘busy season’, ‘busy route’, ‘congestion’ and similar surcharges it has been imposing in recent years through circulars issued outside of the rail budget announcements.

Steel, cement spared

Some of the key commodities that have been spared the new charge include iron ore, steel and cement.

Coal and coke, which account for almost 40 per cent share of Railways goods traffic, will attract a 5 per cent charge. Ores and minerals such as bauxite, calcite, limestone; and petroleum and lubricant products will attract a 7 per cent supplementary charge.

Moreover, Railways has decided to levy a 7 per cent charge on all commodities that are charged in class 120 and below like fertilisers, foodgrains, flour and pulses, oilcakes and oilseeds, leather, rubber, plastic, machinery and machine tools and salt.

Incidentally, a few weeks ago, following the Rs 3 a litre diesel price hike, the Railway Minister, Mr Lalu Prasad, had stated that the Railways was examining the possibility of further reduction in freight rates to leverage its competitiveness over road transportation.

Railways consumes 2.27 billion litres diesel a annum and an increase in the price of diesel by Rs 3 a litre would cost Rs 681 crore annually and Rs 560 crore for the remaining 10 months of the current financial year.

Further reduction in freight rates is also being examined keeping in view the competitive position of the Railways in the transport market to attract more traffic and increase earnings, the Minister had stated.

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