NEW DELHI: Indian industry, battling inflation over the last few months, will have to contend with more bad news. The railways have decided to levy a busy season surcharge of 5-7% on transportation of all products, which would further push up costs.

According to senior railway officials, the move to levy the busy season surcharge on goods carriage is a yearly exercise. The charge would be levied for a few months.

While a surcharge of 5% would be levied on transportation of coal, other products would be charged 7%. In June, the railways had also levied 5% cess on transportation of all commodities. This charge was, however, applicable for only three months.

The move is part of the dynamic pricing policy of the railways to overcome the effect of the fuel price increase,a Rail Bhawan official said.

Diesel constitutes 17% of the railways total operating cost. The charge would be applicable for only three months. The busy season surcharge would be levied on the applicable base rates and will also form part of normal tariff rate, a Rail Bhawan official said.

However, throughout the first half of the fiscal, the railways have offered many rebates to its customers in the form of various discounts. Last week, the railways 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. The move would particularly benefit companies like Nalco and Hindalco.

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.

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 to complete grain procurement.