Railways likely to increase freight again; small units fear hike in input and shipment cost
Updated: Oct 04, 2013 02:08:14pm
New Delhi, Oct 4 (KNN) Close on the heels of sharp increase in the railway freight charges, the railways are planning to hike the rates again, a move which can deal a body blow to the small businesses.
On the side-lines of the International Railways Conference, Rail Minister Mallikarjun Kharge yesterday told media, "We are still examining the Fuel Adjustment Component. This is supposed to be done twice a year. We have not dropped the FAC-linked tariff revision plans.”
In April the tariff was raised by 5.7 per cent and the ministry had also raised the freight for the busy season (October-June) by 15 per cent, though this was not linked to fuel costs.
For small businesses which are already grappling with high inflation and high cost of production, frequent freight tariff revision would over burden them now.
“We are already suffering due to the high inflation, increase in the railway freight will be another blow for the industry,” said General Secretary of Tamil Nadu Small Industries Association, C K Mohan.
“Now most of the entrepreneurs will not opt for railways for transportation and will switch to some other modes. But anyways, all the prices will go up due to railway freight hike. The costs of raw materials, coal, and oil will increase. Along with the shipment cost, the prices in the domestic market will also go up,” Mohan added.
“The cost of the shipment will become very expensive. The entire industry is suffering due to the slowdown, moreover diesel prices are being hiked regularly, this move will have some indirect effects also like increase in the cost of raw materials and added cost will ultimately be passed on to the consumers,” said Rajeev Jain from SEBCO industries who are into exporting bikes.
The Indian Railways annually spends about Rs 25,000 crore on fuel. This includes 16,000 crore on diesel and 9,000 crore on electricity.
The ex- railway minister Pawan Kumar Bansal, in his railway budget speech for current fiscal had said earlier this year that the passenger fare and freight tariff revision would happen twice a year. (KNN/SD)
On the side-lines of the International Railways Conference, Rail Minister Mallikarjun Kharge yesterday told media, "We are still examining the Fuel Adjustment Component. This is supposed to be done twice a year. We have not dropped the FAC-linked tariff revision plans.”
In April the tariff was raised by 5.7 per cent and the ministry had also raised the freight for the busy season (October-June) by 15 per cent, though this was not linked to fuel costs.
For small businesses which are already grappling with high inflation and high cost of production, frequent freight tariff revision would over burden them now.
“We are already suffering due to the high inflation, increase in the railway freight will be another blow for the industry,” said General Secretary of Tamil Nadu Small Industries Association, C K Mohan.
“Now most of the entrepreneurs will not opt for railways for transportation and will switch to some other modes. But anyways, all the prices will go up due to railway freight hike. The costs of raw materials, coal, and oil will increase. Along with the shipment cost, the prices in the domestic market will also go up,” Mohan added.
“The cost of the shipment will become very expensive. The entire industry is suffering due to the slowdown, moreover diesel prices are being hiked regularly, this move will have some indirect effects also like increase in the cost of raw materials and added cost will ultimately be passed on to the consumers,” said Rajeev Jain from SEBCO industries who are into exporting bikes.
The Indian Railways annually spends about Rs 25,000 crore on fuel. This includes 16,000 crore on diesel and 9,000 crore on electricity.
The ex- railway minister Pawan Kumar Bansal, in his railway budget speech for current fiscal had said earlier this year that the passenger fare and freight tariff revision would happen twice a year. (KNN/SD)
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