Rail fare hike though valid could derail small scale industry: KASSIA
Updated: Jun 23, 2014 03:56:49pm
Bengaluru, Jun 23 (KNN) The Railway Ministry’s decision to push through a steep hike in rail passenger by 14.2 per cent across all categories and freight fares by 6.5 per cent is going to hit the small scale industry hard at a time when it is looking for some succour from the Centre, said Karnataka Small Scale Industries Association (KASSIA).
President, KASSIA Chidananda M Rajamane, in a press release said the rail fare hike had come at a time when the small scale industries sector was grappling with cascading wholesale price inflation which had just hit a five-month high.
“The increase in freight fare is going to push up the cost of transporting industrial goods like steel which will further escalate the wholesale price inflation. In addition, the rise in passenger fares is likely to increase the consumer price inflation. This will be a double whammy for the already suffering small scale industries sector,” Rajamane said.
Conceding that the cash-strapped Railways is trapped in a catch-22 situation and the fare hike was inevitable, he said it could have been done after reining in the inflation.
“The argument that the Government was constrained to hike the prices may be valid but that does not alter the fact that the net effect has added to the burden of the small scale industry. The MSME sector is now looking forward to the announcement of the Budget in mid-July for some reliefs,” the release added.
According to official data, with effect from June-25, there will be a flat 5 per cent increase in freight rates and an additional increase of 1.4 per cent on account of FAC (Fuel adjustment Component) which was due since April 2014. The overall increase in freight rates will be 6.5 per cent approximately for major commodities.
As far as passenger fares are concerned, there will be a flat 10 per cent increase in all classes. There will be no increase upto minimum distance for charge. In addition there will be an increase of 4.2 per cent in fares on account of FAC which is due from April 2014. (KNN/ES)
President, KASSIA Chidananda M Rajamane, in a press release said the rail fare hike had come at a time when the small scale industries sector was grappling with cascading wholesale price inflation which had just hit a five-month high.
“The increase in freight fare is going to push up the cost of transporting industrial goods like steel which will further escalate the wholesale price inflation. In addition, the rise in passenger fares is likely to increase the consumer price inflation. This will be a double whammy for the already suffering small scale industries sector,” Rajamane said.
Conceding that the cash-strapped Railways is trapped in a catch-22 situation and the fare hike was inevitable, he said it could have been done after reining in the inflation.
“The argument that the Government was constrained to hike the prices may be valid but that does not alter the fact that the net effect has added to the burden of the small scale industry. The MSME sector is now looking forward to the announcement of the Budget in mid-July for some reliefs,” the release added.
According to official data, with effect from June-25, there will be a flat 5 per cent increase in freight rates and an additional increase of 1.4 per cent on account of FAC (Fuel adjustment Component) which was due since April 2014. The overall increase in freight rates will be 6.5 per cent approximately for major commodities.
As far as passenger fares are concerned, there will be a flat 10 per cent increase in all classes. There will be no increase upto minimum distance for charge. In addition there will be an increase of 4.2 per cent in fares on account of FAC which is due from April 2014. (KNN/ES)
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