In a first, the Indian Railways has discontinued its 15 per cent “lean season discount” on rake rates for the month of July; while it is yet to take a call on whether to continue or not with this surcharge for August and September.
As per a circular, dated June 30, the Railways mentioned, it will continue with a “dynamic pricing policy” and levy a “busy season surcharge” for the ongoing month.
The surcharge of 15 per cent, is over and above the base rate (of rakes).
“....it has been decided by the Competent Authority to extend the busy season charge during the month of July, that is, busy season charge...shall be leviable during July 2023,” the circular, accessed by businessline, mentions.
Normally, the Railways levies this busy season surcharge over an above the regular rake rates for nine months of the year (April to June and again October to March) on all commodities, except coal. For three months – mostly July to September - when commodity and freight movements are generally low because of monsoons, the surcharge is not levied, that is, rakes were given at base rates. And, as per the iron and steel industry parlance, this is considered “lean season discount”.
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The Railways withdrew the ‘busy season charge’ in 2019 to boost freight operations; and continued it in 2020 and 2021, the Covid years. It was brought back October 2022 onwards.
A Railway official, requesting anonymity, said, June demand for rakes was good and “as an experiment it was decided to keep the surcharge on for July.” July demand has been good too.
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Goods carried in June 2023 was 123.056 million tonne (mt), down two per cent YoY. Freight loading last year in June was 125.5 mt. In Q1 (April - June) freight loading was 383.71 mt, up one per cent YoY.
Earnings from freight operations dipped slightly in June to ₹13,316.28 crore, one per cent YoY; while cumulative earnings during April - June was ₹41,880.62 crore.