Railways raises freight rates on key commodities by 8.75% to boost revenue

Rates applicable to coal, iron and steel, iron ore and raw materials for steel plants

Indian Railways on Tuesday increased the freight rates for major commodities like coal, iron and steel, iron ore and raw materials for steel plants by 8.75 per cent, which will translate into an additional revenue of Rs 33.44 billion for the national transporter.

The move to rationalise freight rates is to ensure additional revenue generation across the network to enhance passenger amenities, safety, service and punctuality, Railways said in a statement today. Furthermore, the haulage charges of containers has been increased by 5 per cent and the freight rates of other small goods have been increased by 8.75 per cent.

"However, the freight rates of food grains, flours, pulses, fertilisers, salt, and sugar have not been increased, keeping in mind farmers and the common man. Additionally, the freight rates of cement and petroleum (including diesel) have not been increased," it said. At present, around 45 per cent of the railway's freight traffic is coming from coal, followed by iron ore, cement, pig iron and finished steel. 

During the first six months of the financial year, railways saw an increase of 5.4 per cent in freight traffic to 588.32 million tonne (MT) from April to September, compared to 558.17 MT during the same time last year. Freight revenue too saw 2.7 per cent increase during the first half of the financial year 2019-19 up to September to Rs 536.14 billion as against Rs 521.55 billion during last year April-September period.  

Similarly, passenger revenue for the period under review also saw a 4.9 per cent increase to Rs 255.91 billion versus the same period in 2017-18. Getting out of the declining trend, number of passenger have seen an increase of 1.6 per cent from 4160.4 million from April to September 2017-18 to 4229.05 million during the same time this financial year. 

Railways rationalises flexi fares

Railways on Wednesday discontinued flexi fare system in 15 trains in which average monthly occupancy less than 50 per cent throughout the previous year. The scheme, similar to the dynamic fare system followed by the aviation sector and cab aggregators, had faced public ire, though it added additional revenue to railways kitty.  Moreover, it further rationalised the scheme by discontinuing it in 32 trains, with average monthly occupancy between 50-75 per cent,  during lean season (three months). 

Flexi Fare Scheme was reviewed by an eight-member committee to make it more passenger friendly. The review of the scheme has been done based on the recommendation of the committee, Comptroller and Auditor General’s report, and representations from passengers. The panel changed the maximum current cap of 1.5 times to be reduced to 1.4 times in all classes. The scheme was launched on September 9, 2016 in 44 Rajdhanis, 52 Durontos and 46 Shatabdis.