Mamata set to increase rail freight rates

Union Railway Minister and Trinamool Congress chief Mamata Banerjee has been up in arms against the United Progressive Alliance government for increasing the prices of petrol and the government's inability to check the prices of onions and other essential items.

 

But Banerjee's Railway Ministry is all set to increase freight rates of a large number of items from December 27, with the railways also having been hit by a higher wage bill and rising fuel costs. The railways will increase the rates charged for transportation of sugar, salt, iron ore, steel and other products.

 

According to Anil Kumar Saxena, spokesperson for the Union Railway Ministry, employee wages, fuel costs and input prices have risen. Still, about 50 per cent of the increase has been absorbed by the Railways, he says.

 

Freight rates for coal, coke, cement, caustic potash and some petroleum products will also be increased by a similar amount, according to a Dec. 20 circular posted on the Ministry of Railways' website. Charges for foodgrains and fertilisers will remain unchanged, while rates for salt and sugar will appreciate

marginally, it said.

 

Higher railway freight rates are bound to increase inflation even as the government has been working overtime to bring spiralling prices of various products under control.Onion prices have shot through the roof recently, sending food inflation to a six-week high in the week ending Dec 11. The Centre has banned exports of onions apart from reducing import duty on it to zero. It has also directed state governments to check hoarding.

 
What is interesting is why a railway minister would increase hike freight rates with less than two months to go for the Railway Budget, which would be presented by her in February. Maybe the thinking is to quietly increase the freight rates and then bring down the passenger fares in the budget, since Mamta would like to be seen as a minister looking after the interest of the aam aadmi (common man) with the West Bengal assembly polls to be held in May 2011.