NEW DELHI, Oct 6: The Railways on Monday issued a notification to increase freight rates from October 15 to mobilise additional resources of Rs 240 crore during the remaining five-and-a-half months of the current financial year. However, there has been no increase in passenger fares.

While the classification of coal has been increased by one step to enhance the freight rate by four per cent, exemptions granted to essential commodities, barring salt, sugar and jaggery, have been partially withdrawn.

While the increase in the case of foodgrains, pulses and sugar will be five per cent, hikes in kerosene, liquefied petroleum gas and urea will range from 10 per cent to 16 per cent. In the case of livestock, however, the increase will be about 28 per cent.

A Railway Board press note said the impact on the prices directly from partial withdrawal of exemption from freight to some of the essential commodities will be negligible.

However, the impact of these revisions on the wholesale price index will be 0.314 per cent.

According to calculations made by the Railway Board, the direct impact of the freight hike on hydrogenated oils, refined vegetable oils and edible oils respectively will be 4.99, 5.17 and 6.31 paise per litre. The impact on sugar, wheat, fruit and vegetables will be 3.88, 3.04 and 2.09 paise per kg.

The impact on oilseeds and fodder other than oil cake will be 11.02 and 5.76 paise per kg.The direct impact on LPG and kerosene will be 165 paise per cylinder and 5.90 paise per litre.The impact in case of DAP, ammonium sulphate nitrate and calcium nitrate manures will be 245.50, 288 and 304 paise for every 50 kg bag. Urea will be affected by 222.50 paise per 50 kg bag and organic manure by 99 paise per kg.

The freight rate increases have been necessitated by the additional burden of Rs 3,100 crore imposed by the revised Pay Commission recommendations and the hike in the price of high-speed diesel. The Railways had originally provided Rs 3,425 crore in the Budget for 1997-98 for pay revisions but the improvement in the pay scales by the government has pushed up the burden to Rs 6,200 crore.

With railway minister Ram Vilas Paswan keen on avoiding fare and freight increases, the Railway Board suggested various options to the government to resolve the financial crisis.

One option was to release Rs 1,500 crore out of the Rs 3,690 crore of Railway funds lying with the government on account of depreciation reserves, development and pension funds. However, the finance ministry did not accede to the request.

Despite freight hikes, a shortfall of Rs 800 crore remains even after a decision to effect a five per cent cut in expenditure and measures to maximise earnings to mop up Rs 1,400 crore.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.