Prices of all commodities including food grains, cement, chemical manure, iron ore and coal will go up because Railways have decided to levy 15 per cent busy season charge on all commodities from October 1.The busy season charge of 15 per cent on all commodities will remain in force from October 1 to June, 2014. The container and automobile traffic are exempted from busy season traffic.
The move has come at a time when inflation rate has increased from 5.79 per cent in July to 6.1 in August.The decision comes ahead of the review of fuel adjustment component (FAC), applicable after every six months to adjust fuel prices, also due on October 1.
Besides freight rate, FAC also covers passenger fare. But it seems unlikely that the cash-strapped railways will opt for raising passenger fares further given the political situation with the general elections round the corner.With rising diesel price impacting railways` fuel bill, the national transporter is left with no option than levying busy season charge on freight.
Food prices are already on the rise and any move to raise transportation cost of goods and commodities at this juncture will have a direct impact on inflation.The busy season charge is not levied during the period between July to September as these three months are considered a lean season.
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