Freight Policy and Optimizing Freight

摘要

Government of India introduced pricing policy in 1977 to boost domestic fertiliser production. It also announced equated freight scheme in 1979 to compensate for the freight expenditure. To promote use of fertilisers in inaccessible areas, Central Government introduced "Block Delivery Scheme" during 1980-81 under which it allowed the reimbursement of cost of secondary freight from railheads to the block headquarters. This suffered from inherent weaknesses and manufactures and importers developed a tendency to sell fertilisers in areas close to their production/ import facilities to keep their freight expenditure within the fixed freight element available. To overcome these shortcomings, Government brought in uniform freight policy with effect from 1st April, 2008 to cover all the subsidized fertilisers, including imported urea. This policy provides payment of the rail and road freights towards transportation of fertilisers on actual basis as far as possible. The freight policy became applicable to all the fertilisers uniformly and continues to be even applicable to urea even today in its original form. Uniform freight policy stands modified in respect of P&K fertilisers consequent to introduction of Nutrient Based Subsidy scheme. Implications of GST introduction on freight subsidy are discussed in detail in this paper.