Railways hike freight rates ahead of Budget 2012

With the assembly polls out of the way, Railways on Tuesday withdrew four percent exemption on fertiliser and foodgrain loading rates besides making a 10-15 percent upward revision of other commodities ahead of Rail Budget.The move is expected to increase prices of an array of goods, ranging from coal to fertilizers.

For the Railways, which is expected to garner about Rs 70,000 crore from freight earnings in the current fiscal, this hike would mean a potential to increase annual earnings by up to Rs 18,000 crore.

In 2010, Railways has increased freight rate by four percent on some key commodities such as sugar and some petroleum products to meet rising fuel cost and higher wages.

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The hike comes at a time when railway minister Dinesh Trivedi is under pressure to raise resources to drive the state-run transporter out of a financial mess.

[caption id=“attachment_236981” align=“alignleft” width=“380” caption=“In what is likely to fan inflation, the Railways has hiked freight charges for most commodities including coal, foodgrains and fertiliser”]  [/caption]

However, foodgrains and fertilisers were exempted from the increase by the national transporter.

The exemption was withdrawn as part of rationalising the freight rate, according to a railway notification.

However railways claimed that this increase will not impact the common man as the burden will be absorbed by government agencies like FCI which are primary customers of the national transporter.

Meanwhile, Railways have reduced the freight rate of iron ore meant for exports by 16 per cent.

The new freight rate of iron ore is reduced by Rs 475 per tone and is now fixed at Rs 2,425 rupees per tonne.

According to a railway notification, the new rate is applicable from March 5.

India is one of the world’s biggest exporters of iron and it accounts for 15 per cent of railway freight earnings.

There was a dip in iron ore loadings in the current fiscal as there was ban on illegal mining in Odisha and Karnataka.

PTI