Policy

Cross subsidy burden on freight to impact industry: FIEO

Our Bureau New Delhi | Updated on March 12, 2018 Published on March 14, 2012

The Railway Budget leaving freight rates untouched is on expected lines due to the recent announcement of a hike in rate of transporting key commodities, the Federation of Indian Export Organisations (FIEO) said on Wednesday. FIEO also recalled an earlier hike in freight rates in October 2011 for the busy season.

Mr M. Rafeeque Ahmed, President, FIEO, said the cross subsidisation (of passenger rates by freight) with burden skewed more towards freight is bound to impact the industry severely and more so with mounting inflation and high interest rates.

He suggested that the North-South and East-West Freight Corridor should be implemented within the 12th Plan period so as to facilitate seamless movement of export cargo particularly from land-locked States.

The Railway Minister, Mr Dinesh Trivedi, set a freight carriage target of 1,025 million tonnes for earning Rs 89,339 crore. However, the passenger earnings were estimated at only Rs 36,073 crore even with the fare hike.

The Railways had, last week, announced an across-the-board increase in freight charges ranging from 15-35 per cent for commodities including coal, fertiliser, cement, food grains and petroleum products. However, it had cut freight rate for iron ore export, but hiked it for domestic consumption of the item.

On the Dedicated Freight Corridor, Mr Trivedi cited a World Bank funding of Rs 6,500 crore.

> arun.s@thehindu.co.in

Published on March 14, 2012
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