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Freight rate increase will translate into a maximum increase of 6 paise a kg for retail consumers, the Railway Ministry has said.
“Even on a product where the common man is affected, you will be surprised to know that the actual increase is 1 paise or 2 paise, and in no case more than 6 paise a kg,” Ajay Shukla, Member (Traffic), Railway Board, told BusinessLine . Freight rates for various commodities for different distances have been revised with maximum hike of 10 per cent.
Shukla said the freight rate for some commodities on shorter distances has gone up, while it has come down on longer distances. “If you load HSD (high-speed diesel) from Gandhi Dham to Jammu Tawi, the freight goes down by ₹6.26 lakh. This is the amount of benefit that we are giving to the common man. It is a rationalisation,” he said.
Freight rates for urea, along with grains and pulses, have been hiked by 10 per cent. However, the Railway claims that neither the farmer nor the common man will get affected. It reasons that the retail price of urea is fixed at ₹5,360 by the government, which will remain so, even if cost prices go up.
Similarly, the Railways transport grains and pulses, mostly for the public distribution system where retail price is fixed by the government.
“The common man will not get affected. We have taken special care. Farmers will pay the prices fixed by the government, which is absorbing any increase in the cost,” Shukla said. This hike is expected to give the Railways around ₹4,000 crore.
Despite diesel prices declining by over 20 per cent during the past five months, there is no revision of the Fuel Adjustment Component (FAC).
Shukla said there is a lot of turbulence and nothing can be said about the future.
“We are going to take a longer view and decide,” he added. FAC- linked revision in passenger fares and freight rates was introduced in 2013-14. Last year, the government raised passenger fares by 14.2 per cent, comprising a 10 per cent fare hike and 4.2 per cent FAC hike.
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