NEW DELHI: The Indian Railways have decided to offer 5-6% freight rebate on caustic soda, caustic soda liquor and alumina. The discounts would be applicable to privately-owned wagons only. A reduction in transportation cost of caustic soda is expected to ease prices of various commodities. Caustic soda is a raw material for paints, dyes, chemical compounds and metal. The move would particularly benefit companies like Nalco and Hindalco.

Companies would avail of discounts from the Railways only when they enter into agreements with the Railways for transport of traffic, a Rail Bhawan official said. The rebate, starting from October 2008, would continue throughout the year.

The Railways have also decided to offer discounts of 4.8% on carriage of ammonia and phosphoric acid. These commodities are part of raw materials used by the alloying, chemical, fertiliser and pharma industries. Most of these are used as inputs at various stages of processing in the metal products industry. The move will take off the pressure on the pricing of certain final products meant for industrial use and thereby prevent a cascading effect of rising prices, a logistics expert said.

The Railways move would also ease pressure on economy hit by runaway inflation caused due to steep rise in prices of essential commodities. The government has been fighting inflation due to rise in prices of various raw materials.

Earlier, the Railways had cut freight rate for iron ore. Similarly, it had placed a ban on private loading of wheat in rail wagons in April to allow the Food Corporation of India (FCI) to complete procurement and prevent rise in prices that would have resulted if excessive grain went to private traders.