Adhir Chowdhury in New Delhi on Tuesday. Picture by Ramakant Kushwaha
New Delhi, Aug. 27: The government will hike railway freight rates from October because of a rise in fuel costs, minister of state for railways Adhir Chowdhury said today. However, passenger fares will not be hiked, he said.
Chowdhury did not disclose the amount of hike in freight, saying the hike was a result of a proposal made in the last railway budget that linked rates with fuel costs.
“The tariff has already been increased. According to the proposal of the budget, it will be hiked again in October,” said Chowdhury on the sidelines of an Assocham conference on modernising the railways.
Indian Railways had earlier hiked the freight rate by 5.7 per cent on April 1 while linking the fuel adjustment component (FAC) with the goods tariff. FAC is linked with fuel and energy prices and calculated accordingly.
“FAC was proposed in the budget. It is a budget proposal that tariff will be examined taking the fuel cost in mind after every six months,” the minister said.
Asked whether passenger fares will also be considered for a further hike, Chowdhury said, “No. It will be freight only.”
He said the freight charges would change depending on global fuel prices. “If the global oil price decreases, our freight tariff would also go down. The rupee value and the current economic scenario are volatile. It is a concern for all of us.”
The railways are in the process of setting up the Rail Tariff Authority (RTA) for which it got cabinet approval this month. Once the RTA is constituted, it will suggest the level of tariff for both freight and passenger fares from time to time taking into account input costs and market conditions.
Chowdhury said India should emulate China’s progress in the railways sector and hoped for better co-operation between the countries.
“It is my wish to travel from Delhi to Beijing in a train. When we are talking of a barrier-free world, let us dream first. All problems will be solved if friendship between the elephant and the dragon is established,” he said.
Last week, rail authorities said the formation of the RTA would soon be formalised through a resolution of the railways. The independent body will have an advisory role in deciding passenger and freight tariffs. The proposal to set up the RTA, a move aimed at freeing passenger tariffs from political interference, was approved by the cabinet on August 2.