Rail incentives to boost industrial growth

New Delhi: In order to provide support to the Indian industry which is facing slump at present, the Railways has decided to give freight incentives to help it tide over the present economic situation.

“As there is lesser growth in industry, there has been lesser demand for rake for freight. We want to reduce cost of transportation to help industry. Through these measures we hope to meet our targets and make money,” said Member (Traffic), Railway Board Mr P.S. Mishra while announcing measures to support various segments of the industry.

In view of the present economic situation, the Railways has decided to defer the “Busy Season Charge” (BSC) of 15% for the time being on all items except iron ore and petroleum oil lubricants. The BSC is levied from October 1 to June 30 every year on transportation of several items except for coal, coke and container traffic that are exempted.

The Railways has also decided to defer additional 5% “Supplementary Charges” on mini and two-point rakes. Deferring this is likely to boost loading of smaller cargo sizes and help cement, steel, automobiles, food grains and fertilizers loading.

In addition, the Railways has decided to increase the number of rakes to provide transportation to the automobile sector. Mr Mishra said that special wagons are being designed for the automobile sector to help them transport vehicles safely through trains instead of road. He said this will help the struggling automobile sector cut down on costs and the step has been taken following representation from several automobile companies. Maruti, Kia Motors and Ford are some of the companies that have shown interest in using Railways facilities, the official said.

“We had limited business of only 2% in auto sector which we are trying to increase. We are increasing the rakes for automobiles from 10 to 26  and will try to take it to 50 at some point of time,” Mr Mishra said.

Among other steps, the Railways announced changes in the round-trip charging on container traffic. Under this scheme, haulage charge for 0-100 km slab will be charged for total to and fro movement, instead of charging for 0-50 km slab each way. This will work out to be about 35% cheaper and give a fillip to EXIM traffic between ports and Inland Container Depots.

The Railways will give 25% discount on movement of empty containers and empty flat wagons to ports thereby increasing loaded container traffic in return. “This is expected to enhance price-competitiveness of Railway vis-a-vis other modes of transport and expand freight basket by capturing new traffic,” Mr Mishra said.

The Railways has also announced large-scale de-notification of commodities for container traffic and measures to enhance ease of business and digitisation.