Get ready to pay more for foodgrains such as wheat, rice, pulses and edible oils from April 1.
Railway Minister Pawan Kumar Bansal announced about six per cent hike in basic freight rates for these commodities. The hike in rail freight rate is linked to the deregulation of diesel prices for bulk consumers.
Bulk of the foodgrains, such as wheat and rice, is moved across the country through the rail network. In 2013-14, the Railways is targeting freight earnings of Rs 7,243 crore from foodgrain movement of 49 million tonnes.
In 2012-13, freight earnings from foodgrain were at Rs 6,712.45 crore, a 37 per cent growth over last year’s Rs 4,911.92 crore.
“The increase in freight cost will marginally inflate the price of wheat products,” said Adi Narayan Gupta, President, Roller Flour Millers Federation of India. But Gupta did not say by how much the prices would go up.
Consumers in Southern States may feel the pinch more, as wheat is shipped from Madhya Pradesh and Punjab.
“The open market sale price for wheat, which is linked to railway freight rates, will go up. As a result, prices for end consumers would go up by at least 10 per cent,” said Pramod Kumar, Managing Director of the Bangalore-based Sunil Agro Foods.
However, the impact of the hike is unlikely to be felt on pulses, considered a high-value commodity. “The freight hike of Rs 80 a tonne on the average value of pulses that range from Rs 35,000 to Rs 40,000 tonne would be negligible,” said Pravin Dongre, President, India Pulses and Grains Association.
Though not much of edible oils are moved through the rail network, there would be an indirect impact of the freight hike on the prices, said B.V. Mehta, Executive Director, Solvent Extractors Association of India. He, however, declined to quantify the rise in prices.
The freight rate for urea has also been hiked by 5.80 per cent – a move that may not impact the end consumers but would certainly inflate the fertiliser subsidy bill.
Satish Chandra, Director-General, Fertiliser Association of India, said the proposed hike in freight rates would not have any impact on the prices of nutrients, as the Government currently reimburses the primary freight receipts.