Indian Railways on Tuesday has decided to increase freight
rates by up to 20% for several commodities. The move is expected
to increase prices of an array of goods, ranging from coal to fertilizers.
The hike points to the government taking tough decisions
with elections in five states, including the politically-critical UP, out of
the way. Although rail officials termed it a routine increase, the timing drew
a lot of attention as it came barely a week before the Railway Budget is due to
be tabled in Parliament.
While operators in freight business claimed the hike could
cost them around 30% more, a zonal railway official said, “The increase
will be around 15%-20% if compared with last rates.”
A coal transporter
said freight rates will rise around 20%, which will pile up pressure on sectors
such as power and steel that are used to fire plants. Rail officials justified
the move, saying it is consistent with the Dynamic Pricing Policy that aims to
rationalize freight rates. The last hike took place in December, 2010.
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