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Iron ore has turned out to be a milch cow for the Indian Railways. In past three years, the Railway freight on iron ore has been revised upwards several times through announcements made mostly outside the Rail Budget. On October 29, 2004, the iron ore classification was raised from 120 to 130 and further to 140 a few days after on November 27 the same year. On May 15, 2005, the classification was raised again to 160 and further to 170 on July 1, 2006. In Rail Budget 2007, the classification was revised downward to 160 only to raise it again to 170 from January 7 this year. What has been particularly upsetting for the iron and steel sector is that in addition to the hike in basic freight, there have been additional imposts in the forms of busy season surcharge on coal and coke, limestone and dolomite, all raw materials for steel plants, and busy route surcharge subsequently replaced by congestion surcharge over and above terminal charge and development charge. The iron ore exporters have been particularly hit as a result.

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