Railways ministry on Tuesday hiked the basic freight charges of grains, pulses and groundnut oil by nearly 6%, a move that will lead to increase in prices of food items.
Freight rates of urea have been increased by 5.8%, which could have an impact on the government's fertiliser subsidy bill.
Freight rates of grain and pulses have been increased to Rs. 1,403.6 per tonne from the current Rs. 1,326.8 per tonne at an average lead of 1,307 km.
Similarly, Railways increased freight rates of groundnut oil to Rs. 1,848 per tonne from the present Rs. 1,746.60 per tonne at an average lead of 1650 km.
In case of urea, the freight charges increased to Rs. 920 per tonne from the current Rs. 869.60 per tonnes at an average lead of 886 km.
The rates exclude development charge and busy season charges which essentially means that actual hike would be higher, according to the Railway Budget for 2013-14 presented in Parliament by rRailway minister Pawan Kumar Bansal.
Freight rates have been increased due to deregulation of diesel prices for bulk consumers.
Bansal also announced adoption of Fuel Adjustment Component (FAC) which will be dynamic in nature and freight charges will be revised twice a year based on changes in input fuel cost.
"In the light of deregulation of the HSD oil, Railways' finances need to be rationally insulated and to this end a mechanism to neutralise the impact of fuel prices on operating expenses is required to be put in place," Bansal said.
"In the Budget 2012-13, my predecessor had proposed to segregate fuel component in tariffs as FAC. As then suggested, I propose that this component be dynamic in nature and change in either direction with the change in fuel cost, say twice a year. It is proposed to implement the FAC-linked revision in only freight tariff from April 1, 2013," he added.