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Quiet freight rate hike leaves industry dismayed

business Updated: Mar 15, 2012 00:54 IST
HT Correspondent
HT Correspondent
Hindustan Times
Railway Budget

While the Railway Budget this year has moved away from the trend of taxing industry to compensate for subsidised passenger travel, industry is dismayed by a subtle hike in freight rates effected earlier this month.

Freight rates have been hiked across the board recently that will help Railways earn between Rs 15,000 crore and Rs 20,000 crore in the next fiscal. The hike varied for different commodities ranging between 15% and 35%. For coal and cement, the hike was between 18% and 24%, while for foodgrains and fertliser, it was between 20% and 35%.

"What is the point in increasing freight rates on March 1 when the budget is to be presented in two weeks? It is not fair," said RG Bagla, group executive president, JK Cement. "The increase is also steep. It will make a bag of cement costlier by Rs 10. We do not get facilities commensurate to the rates that we are charged." http://www.hindustantimes.com/Images/Popup/2012/3/15_03_12-buss25b.jpg

The biggest disappointment, however, was for the lack of dynamism and vision in the budget.

"The increase in freight rates was expected as inflation has gone up even though it is a little steep in this case," said HM Bangur, managing director, Shree Cement. "But where is the growth path? No forward looking statements were made."