Indian Railways announces incentives to boost economy
The Indian Railways has decided to defer the implementation of Busy Season Charge till further advice.
Indian Railways has announced certain freight incentives to boost the Indian economy. The measures were announced by Railway Board member PS Mishra on September 12, 2019 to support various segments of the industry.
New Railway measures: In Detail
Freight rate related measures
1. Levy of Busy Season Charge deferred
The Indian Railways has decided to defer the implementation of Busy Season Charge till further advice. The charge is levied at 15 percent from October 1-June 30. Now, the levy of the charge will be deferred except for iron ore and POL. Coal & coke and container traffic were also exempted from the charge.
2. Waiver of supplementary charges on mini and two point rakes:
The Indian Railways has decided to waive off the 5 percent supplementary charges applicable on the loading on mini and two point rakes. The move is expected to boost loading of smaller cargo sizes and help in the loading of cement, food grains, steel and fertilizers.
3. 25 percent discount on empty container and empty flat wagon movement
The Railways has decided to provide 25 percent discount in the movement of empty containers and empty flat wagons. The discount aims to encourage the movement of empty flat wagons to ports, thereby, increasing loaded container traffic in return. The move is expected to enhance price-competitiveness of Railway through other modes of transport and expand freight basket by capturing new traffic.
4. Round-trip charging on container traffic:
The Indian Railways has decided to start round-trip charging on container traffic. As per haulage charge rating of container traffic, the minimum distance slab for charging is 0-50 km and largely the container traffic in this ultra-short lead is very low.
Hence, the Railways have decided to introduce round-trip charging of container trip for a distance that is less than 50 km on each way. With this, the haulage charge for 0-100 km slab will be charged for to and fro movement, instead of charging for 0-50 km slab each way. This would be 35 percent cheaper. It is expected to give a boost to the EXIM traffic between ports and Inland Container Depots.
5. Large-scale de-notification of commodities for container traffic
Under container haulage charging policy, the notified commodities are charged at Container Class Rates (CCR), which is 15 percent lower than General Tariff Rates (GTR), while the remaining commodities are charged at Freight All Kind (FAK) rates. The FAK rates are lower than CCR.
The Railways recently de-notified 90 more commodities. Now, out of 635 commodities in Goods Tariff, only 38 commodities fall under the notified category with CCR rates.
5. Freight Marketing initiatives:
The Railways has inducted more New Modified Goods car rakes and also introduced a new design of Bi-level auto car wagons (BCACBM wagons). The rationalization of road railer with 4 new weight slabs instead of earlier 3 weight slabs has also made rates more competitive. Further, the weight and weighment conditions have been relaxed in perishable traffic when loaded in goods wagons.
Measures to enhance ease of business and digitisation
1. Pan-India Implementation of eT-RR
The Railways successfully implemented the facility of Electronic Transmission of Railway Receipts (eT-RR) across the country with effect from August 1, 2019. The facility is a paperless and user-friendly transaction system where the Railway receipt is generated and transmitted to the customer electronically through Freight Operation Information System (FOIS).
The delivery of goods is given through e-surrender of eT-RR. This saves the customer the hassle of carrying physical Railway Receipt from the originating station to the destination. The electronic receipt facility is expected to bring down the transaction costs of rail customers and also pave the way for further digitization in the Indian Railways.
2. Weighment-related reforms
The Railways has permitted pre-weigh bin system for weighment of goods traffic in private sidings. The move is expected to bring down the time for weighment and loading and bring in higher accuracy in weighment. Under the earlier policy, if a second weighment of wagons was done, the higher reading was considered final for charging or levy of penalty. The policy has now been modified and the second weighment will be considered final for charging.
The policy change makes the second weighment more meaningful and it is expected to redress customers’ grievance in accuracy of Weighment.
Further, the Railways has exempted low density commodities such as Pet Coke, Met Coke, Chuni and De-oiled cake from mandatory weighment. This is expected to save transit time and increase fluidity, which will translate into cost saving for customers.