labels: Economy - general
New rail budget concludes freight rationalisation; relief to north-east states news
26 February 2008

Concluding the rationalisation of the freight structure, railway minister Lalu Prasad has proposed to reduce freight rates for petrol and diesel by 5 per cent, and fly ash by 14 per cent, estimating earnings of Rs52,700 crore from goods traffic in fiscal 2008-09.

Presenting the Railway Budget for 2008-09 in the Lok Sabha on Tuesday, Prasad said the estimated earnings from goods traffic for this fiscal would be Rs52,700 crore as against the revised estimate of Rs47,743 crore for 2007-08.

The railways has estimated that goods traffic will go up by 60 million tons over the revised estimates of 790 million tons for the current fiscal.

The minister also announced 6 per cent discount in freight rates for goods traffic like tea, coal and bauxite originating from other states for stations in the north east.

The railways has also decided to rationalise the categories of goods for freight rates to ensure the difference between the highest and the lowest is not more than two times and decided to reduce the highest class from Class 210 to Class 200. 

As a result, the change in goods classification the freight rate of Rs3,655.90 per tonne would be reduced to Rs3,481.80 for a distance of up to 4,275 km, but will not benefit across-the-board the industries that require movement of bulk goods.

Claiming an unprecedented growth in freight traffic, Yadav said that unlike in the past, freight rates are no more based on the value of goods, but are fixed after taking into account railways' competitiveness and elasticity of demand.

Under the new pricing strategy, he said surcharge is levied during peak season and discounts offered during lean season. 

Peak and non-peak seasons have been fixed uniformly for all the commodities, Prasad said.

For loading of incremental traffic from empty flow direction, the discount has been increased from 30 per cent to 40 per cent, which will benefit old customers as well.

He said zonal railway general managers would be empowered to offer discounts of up to 50 per cent on incremental traffic loaded from sidings and up to 40 per cent on the entire traffic loaded from goods sheds. 

This is likely to attract more traffic. Merry-Go-Round traffic scheme Under the Merry-Go-Round (MGR) traffic scheme, Yadav said the Railways would provide terminals at both ends with associated track and infrastructure at a lump sum rate.The Railways has set up a target of 1,100 million tons of freight loading by the end of 11th Plan and would add a capacity of 310 million tons over the next four years.


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New rail budget concludes freight rationalisation; relief to north-east states