Hike in rail freight hits salt makers hard

While the salt production is set to pick up with the onset of summer,the sudden 30% hike in railway freight from the beginning of March has dealt a severe blow to the industry that has to cope with a sharp increase in its transportation cost.

Written by Express News Service | Rajkot | Published:March 16, 2012 4:13 am

While the salt production is set to pick up with the onset of summer,the sudden 30% hike in railway freight from the beginning of March has dealt a severe blow to the industry that has to cope with a sharp increase in its transportation cost.

Gujarat accounts for nearly 70% of the salt production in India. The salt pans spread on the coastline of Kutch and Surendrnagar districts employ over 10 lakh workers,who have threatened to launch an agitation if there is no rollback of the increase in railway freight at least by 50%.

So far,the industry was hoping that the rollback demanded by it would be reflected in the railway budget,but their hopes were dashed on Wednesday.

“Hours after the election results for six states were announced,a 30 per cent hike in freight was mentioned on the railway website. There was no formal announcement in the media,” said Gujarat Salt Manufactures Association president Hiralal Parekh,adding it means an extra burden of Rs 100 crore on the salt industry in Gujarat.

Till February-end,transportation through rail racks for 2,500 tonnes of salt cost Rs 40 lakh. Salt makers say new freight charges would reduce their profit margin of Rs 150 per tonne to a pittance.

“After several representations,we were hoping for at least 50% rollback in the budget,” said Parekh. “It’s a question of survival for the industry that accounts for over 70% of India’s total two crore tonnes of salt production.”

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