Railways has decided to levy its annual busy season charge on freight which will increase the rates by 15 per cent between October this year, and March 2014.
The increase is applicable on all commodities and is around five per cent more than the previous busy season charge levied between April and June this year. The move is expected to have an adverse impact on inflation.
The rate at which the national transporter carries cement, foodgrains, chemical manure, iron ore and coal will see the jump. The container and automobile traffic are exempted from busy season traffic. The move has come at a time when inflation rate has increased from 5.79 per cent in July to 6.1 in August. This is part of Railways’ existing policy to have a dynamic pricing on freight rates depending on the time of the year.
The decision comes ahead of the review of fuel adjustment component (FAC), applicable after every six months to adjust fuel prices, also due on October 1.
With rising diesel price impacting railways’ fuel bill, the national transporter is left with no option than levying busy season charge on freight. Busy season charge is not levied between July to September as it this period is considered to be a lean season.