Consumers already groaning under the burden of an upward spiral in the prices of onions and vegetables will now have to swallow yet another bitter pill. The government, even as it battles the ongoing onion crisis, has now decided to revise the freight rates for some commodities carried by the Indian railways. This, in turn, is expected to fuel the inflationary trend.
The railways, headed by Trinamul Congress leader Mamata Banerjee, have decided to increase the freight rates for certain commodities, among them iron and steel, cement, salt and sugar. The new rates will come into effect from December 27.
The hike is more substantial four per cent for transportation by rail for commodities like iron, steel, coal, coke, cement, caustic potash and some petroleum products. The railways sought to defend the hike saying that the rates are “adjustments” that have been made after a gap of nearly four years.
Further, an official said that the increase in the freight rates for salt and sugar is marginal. Economists, however, fear that the increase in the transportation costs of all these products will not only increase their prices but have a cascade effect on the prices of some other commodities too.
There was no hike in either passenger fares or freight rates in the budget presented by Ms Banerjee in February this year. But the need to revise the freight rates of some commodities has been felt as the cost of the railways operational inputs have increased as also fuel besides an increase in operational costs. Further, employee wages in view of the Sixth Pay Commission have also gone up, the official added.
Justifying the increase in freight rates for hauling salt and sugar, the official said that it is only four paise per kg for the first 500 km for sugar. For distances over 500 km, the increase will be seven paise per kg.