Industry gives thumbs up, but hopes Lalu won’t backtrack later on…

“It is a progressive budget and Railways, with a return of capital of 21 per cent, is in the pink of health. It will give a fillip to the steel industry and we have to gear up for the demand that will be generated as a result of these policy decisions,” said Titagarh Wagons Ltd chairman and managing director J P Chowdhary. With 20,000 wagons to be manufactured this year, it is expected to generate a demand of at least 3,00,000 tonnes of steel.

However, worries remain about the minister backtracking later on. “We are happy that freight rates for iron and coal have been left untouched even though the rate for the former had gone up consistently last year,” said Jindal South West joint managing director Y Siva Sagar Rao.

For a change, miners have joined the steelmakers in welcoming the budget. “The budget is good for us as the freight rate has not been tampered with. However, we hope that it would not be increased during the course of the year like it happened last year,” said Baldota Group director Rahul Baldota. Last year, freight rates for iron ore were revised five times resulting in an increase of 52 per cent.

The happiest lot is the cement manufacturers who have so often been at the receiving end of policymakers. While the impact of the cut would be marginal, savings would also result due to discounts on freight booked in the lean season. But, like the iron and steel industry, even cement bore the brunt of freight rate increases in the middle of the year.

“While there has been no upward hike for freight rates for our bulk goods, throughout the year we have got used to cost pushes relating to railway rates directly or indirectly. Last fiscal itself there were at least four such increases impacting cement or raw material movements,” said ACC Ltd managing director Sumit Banerjee.

“The incentive proposed for fly ash traffic is definitely a positive one. Most fly ash movements for us take place through road today, and we shall see how much of that can be possibly and remuneratively shifted to rail,” he said.

Freight rates in Rail Budget 08-09

• No across the board increase in freight rates

• Highest class 210 reduced to 200 concluding rationalisation process

• 5 per cent cut in freight rate for petrol, diesel

• 14 per cent reduction in fly ash freight rate

• 30 per cent discount on entire traffic in place of incremental traffic booked from goods shed

• 6 per cent concession for traffic booked from other states for stations in north eastern states

• Special lump sum rates for Merry-Go-Round services for customers who will provide track, OHE and terminals at both ends