The Railway Ministry’s decision to push through a steep hike in rail passenger fare by 14.2 per cent across all categories and freight fares by 6.5 per cent is going to hit the small scale industry hard, said Karnataka Small Scale Industries Association (KASSIA).
“The hike is coming at a time when small industries are looking for some succour from the Centre. The fare hike will affect the sector which is grappling with cascading wholesale price inflation, which had just hit a five-month high,” Chidananda M Rajamane, President, KASSIA said.
“Now, the increase in freight fare is going to push up the cost of transporting industrial goods like steel which further will escalate the inflation. This will be a double whammy for the already suffering small scale industries sector,” he added.
Conceding that the cash-strapped Railways was trapped in a catch-22 situation and the fare hike was inevitable, Rajamane observed, “the fare hike should have been done only after reining in the inflation.”
“The argument that the Government was constrained to hike the prices may be valid but that does not alter the fact that the net effect is it has added to the burden of the small scale industry. The MSME sector is now looking forward to the announcement of the Budget in mid-July for some reliefs,” KASSIA release said.