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Trade bodies feel let down

Our Bureau

MUMBAI, Feb. 25

TRADE bodies feel disappointed by proposals in the Railway Budget. The increase in freight rates on most industrial products and raw materials will raise industrial costs sharply and dampen consumer interest in the market, said Indian Merchant Chambers ( IMC).

According to Mr. Pradeep B. Chinani, IMC President, the Railway Minister has inflicted the unkindest blow on an industry which is already struggling to recover from a two-year industrial recession.

Mr. Chinani expressed serious concern over the Railways' inability to tap internal resources, which he said is potentially disastrous as its pension liabilities have increased from Rs. 4,094 crores to Rs. 5,314 crores this year.

There are fears that the freight hike may cause a serious setback to the export efforts and render Indian products uncompetitive in the global market.

Mr. Navaratan Samdria, President of the Federation of Indian Export Organisations (FIEO), said the hike in freight charges of five per cent may affect the export sector which has just started recovering from the difficult phase it had been passing throu gh in the past two to three years.

According to him, the cumulative effect of hike in rail freight and the imposition of service tax on transporters signal difficult times for exports, said Mr. Samdria, in a press release.

Mr. Vijay Kalantri, President of the All-India Association of Industries, said the five per cent hike in freight rates will lead to a rise in prices of all commodities except essentials and urea.

Mr. Kalantri said the industrial sector, already burdened with high costs of power, transportation and indirect taxes, would have no option but to pass on the additional freight cost to consumers. The proposed hike in core sectors such as coal, iron and steel, cement and chemicals will affect the prices of a whole range of commodities being produced as both raw materials and finished goods, he said.

Mr. Kalantri said that export-oriented units and small and medium scale industries could have been spared the ``harsh effects'' of freight hike.