Business Today
Freight rates hiked by 5.8%, passenger charges also up

Railway Minister Pawan Kumar Bansal has proposed to implement a fuel adjustment component on freight tariff from 1 April, 2013.

Continuing efforts to clean up Railway finances, the Budget for 2013-14 on Tuesday effected an across-the-board 5.8 per cent hike in freight charges to net in Rs 4,200 crore a year while raising passenger reservation and related charges to rake in an additional Rs 483 crore.

Railway Minister P K Bansal, the first Congress Minister to present Railway Budget in 17 years, however, did not touch the basic passenger fares which he had hiked across-the-board only last month to raise Rs 6,600 crore.

Adopting the dynamic fuel adjustment component (FAC)- linked revision in tariffs, proposed by his Trinamool predecessor Dinesh Trivedi last year, the Minister slapped an average 5.8 per cent increase on goods.

This will cover among other things foodgrains and pulses, coal, iron and steel, urea, iron ore, diesel, kerosene and LPG, which the industry and political parties feared could lead to further inflation spiral.

Beginning April 1, the FAC will be adjusted in freight rates twice a year in line with changes in diesel price. "In the light of deregulation of high speed diesel (HSD), 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.

The upward revision of reservation fee and supplementary charge for superfast trains will mean an increase ranging from Rs 5 on the second class to Rs 25 on AC 1st and Executive Class.

Tatkal charges will go up by Rs 15 on sleeper class to Rs 100 on Executive Class. Clerkage and cancellation charges will go up by Rs 5 on second class to Rs 50 on Executive Class.

The Budget proposes to withdraw the enhanced reservation fee and proposes no increase in parcel and luggage rates. The changes will come into effect from April 1.

Bansal told a post-Budget press conference that he was no apologetic about the hike in freight rates and passenger charges.
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