The railway ministry yesterday announced a hike in rail freight rates, effective from October 15, to mobilise Rs 240 crore during the remaining period of the current financial year while leaving passenger fares untouched.
According to a press release issued by the railway ministry, the direct impact of the freight increases on inflation would be negligible. The impact of these revisions on the wholesale price index is estimated at 0.314 per cent.
The freight rate of coal has been hiked four per cent while freight hike exemptions granted to certain essential commodities in the 1997-98 railway budget have been partially withdrawn. However, salt, gur, sugar and jaggery continue to be completely exempted from a freight hike.
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In the case of commodities like edible salt, chemical manure, urea, hydrogenated oils, edible oils, fruits and vegetables, kerosene, LPG, sugar and wheat, the increase will range from 10 to 16 per cent on average for train load movement. In the case of livestock, the increase will be about 28 per cent. The total value of these exemptions for the current year had been estimated at Rs 770 crore.
The railway board is staging a resource mobilisation exercise to raise around Rs 2,400 crore to implement the fifth pay commissions report. However, this figure is likely to come down by about Rs 300-400 crore following the decision to defer payment of one instalment of pay commission arrears.
Despite yesterdays decision, the railways will still face a shortfall of about Rs 800 crore. Last Saturday, the board had decided to effect a five per cent cut in expenditure and step up measures to maximise earnings to mop up about Rs 1,400 crore. Railway board sources said efforts would now be made to improve performance, effect fuel economy and launch a vigorous drive to realise outstanding dues of over Rs 1,000 crore from various state electricity boards. The railways will review the situation in December while formulating revised estimates after getting feedback on the success of the recently announced measures, a senior official said.