Railway Budget spares cement, steel
By A Business Correspondent
The Railway Minister's bid to rationalise freight rates has come at an opportune time for the cement industry, which has been reeling under depressed price realisation in recent weeks. In his annual budget speech, delivered on February 26, the minister announced rationalisation of freight rates which stipulates a reduction in the number of freight categories from 59 to 33. Freight charges are to be regressive, with tariffs coming down with increase in distances. The cement industry has not only been spared from a freight rate hike but there has also been a slight fall in freight charges for the sector as a whole. However, the marginal increase in freight rate for coal may lessen the impact of rationalisation to an extent.
On the other hand, overall impact of freight rationalisation on steel industry is expected to be neutral. While the Railway Minister has reduced freight rates on finished steel, he has hiked the same for raw materials used in steel production. For iron ore the average freight increase has been estimated to be 0.44 per cent and freight on coal has been increased by 1.2 per cent. Freight rate on finished steel has been reduced by 3 per cent for movement over 700 km.