Railway Budget effect: Freight hikes up food, fuel worry

New Delhi: Railway freight rate was on Tuesday hiked by nearly six per cent across the board, which is likely to result in higher prices of foodgrain, diesel and LPG.

Increase in freight rates is on account of de-regulation in the diesel prices for bulk consumers such as railways.

Oil companies transport over 32 to 33 per cent of diesel, LPG and kerosene through railways and the hike in freight rates will either have to be passed on to consumers or will have to be accounted for as under-recoveries, which the Centre will have to compensate from the General Budget.

Sources said that it was unlikely that the government, which is hard pres-sed for finances, would agree to take on additional burden and the freight increase is likely to be passed on to consumers.

The freight rates exclude development charge and busy season charges, according to the Railway Budget for 2013-14 presented in Parliament by railway minister P.K. Bansal.

Freight rate for grain and pulses has been increased to Rs 1,403.6 per tonne, from the existing Rs 1,326.80 per tonne for average distance.

In fuel category, freight charges of high-speed diesel oil have been raised to Rs 1,041.8 per tonne, from Rs 984.80 per tonne, while freight on both kerosene and LPG increased to Rs 937.60 per tonne from Rs 886.30 per tonne.

For urea, a major fertiliser, the rate has been raised to Rs 920 per tonne from Rs 869.60 per tonne. On iron and steel, freight has been hiked to Rs 1,541.50 per tonne from Rs 1,457.10 per tonne.

He also proposed to increase in coal freight rate by 5.7 per cent, which may lead to a marginal increase in the electricity tariffs

Railways sticks to Plan spend
-DC/Pawan Bali

Hit by fund crunch, railway minister P.K. Bansal said on Tuesday that the railways will go for fiscal discipline.

“Austerity and economy in expenditure will be observed by the railways rigorously and no wastages will be permitted,” he said while presenting the railway budget in Parliament.

He said that for the first time in the last 25 years, the railways did not present any supplementary demands for grants either in the monsoon session or winter session of Parliament in 2012.

“Targets for eliminating inefficiencies in the maintenance of rolling stock and fuel consumption are being made mo-re stringent,” the minister said.

He said that 347 ongoing projects have been identified as priority projects, and provided committed funding. Railways intend to ensure funding of these projects at required level during the 12th Plan  so  as  to  complete  them  in  a  time- bound  manner.