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Without mentioning it in his budget speech, Railway Minister Suresh Prabhu on Thursday altered the freight structure of the Indian Railways, whereby base rates of freight saw a 10 per cent jump.
Outside Parliament, after the Budget, Prabhu allayed fears of impact on prices of important commodities because of the rise, saying such adjustments were normal. Later, Member, Traffic, Ajay Shukla explained that the rationalisation was meant to end an anomaly in the freight model and that it would in fact result in reduction in cost of moving a number of commodities by rail even as marginal increase in some other commodities was expected.
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The present system of charging freight on Railways is a combination of distance slabs and commodity classes. Thus, in each class certain commodities are kept and freight is charged on those commodities on a variable scale depending on distance. Shukla said this system created certain disparities whereby slight change in the distance made a bigger impact on the freight charged due to change of distance slab. This was causing concern to the customers. “It was felt that such anomalies need to be addressed,” he said.
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