The rail fare hike, which will add to inflation, has got mixed response from industrial users. While real estate developers want a review, the fertiliser industry does not see much impact as the sector gets subsidy.

Cement maker Shree Cements felt that the decision was a step in the right direction. Steel and cement are two main raw materials for the real estate industry and are transported mainly through Railways.

HM Bangur, Managing Director, Shree Cements, said, “It looks like a painful situation in the short term but the fare hike was a must and the only way for economic health. As far as prices are concerned, we will see the rail budget and the general budget and assess the full impact after some time.” Sonal Varma, Executive Director and India Economist at Nomura, said, “The rise in passenger fares will add around 10 basis point to CPI inflation, while there will be a limited indirect impact on the CPI from the freight hike.

“WPI inflation is likely to see a marginally larger impact as the cost of transporting goods such as coal, cement, oil, steel and food grains will rise. However, the hike will improve the profitability of the railways and hence it is a move in the right direction.”

Satish Chander, Director-General, Fertiliser Association of India, said, “There will be no implications on us as cost of transporting urea is reimbursed by the Government. The MRP is also fixed by it.” Even if there is no price hike for the end user, the Government subsidy burden will go up.

Pradeep Jain, Chairman, Parsvnath Developers, said, “This is blow to the industry and would have a magnifying effect on price of steel, cement etc which are already touching sky. At a time when the sector is already experiencing tough times, any such incidence is going to hit us hard.

“We are in no position to increase property prices as the industry is already having millions of unsold units. We appeal to the Government to review its decision.”

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