Freight rate hike to get Rs 4000 cr; no Rail fare increase

The Railway Budget today hiked freight rates on cement, coal, foodgrain and pulses, urea, kerosene and LPG by up to 10 per cent to mop up an additional Rs 4,000 crore a year but spared passengers from any raise in fares while ruling out privatisation.
Presenting his maiden budget, the first full-fledged exercise of the Modi government, Railway Minister Suresh Prabhu did not announce any new trains or lines pending a review but said he would concentrate on consolidating the existing ones.
"I have not increased the passenger fares," he announced at the outset of his hour-long budget speech and made no mention of the rationalisation of freight rates that was done by a sleight of hand through an explanatory memorandum.

The hike, which will be effective from April 1 this year, will cover a wide-range of items like cement, coal, grains and pulses, urea, iron ore, kerosene and LPG.
While common salt has been left untouched, in the case of diesel and limestone there will be a marginal reduction in the freight adjustment done through re-classification of goods and distance rationalisation.
At the post-Budget briefing, Prabhu sought to justify the exercise saying rationalisation has always been done while Member (Traffic) Ajay Shukla was at pains to project that on some goods actually there will be reduction in freight on longer distance.

Minister of State for Railways Manoj Sinha said there will be no increase in the prices of urea for farmers since the government will be subsidising the commodity.
But officials estimated an additional revenue mobilisation of Rs 4,000 crore a year on account of freight increase. Industry associations estimate Rs 3,000 crore subsidy burden on movement of urea and Rs 600 crore on foodgrains.