Down rating of goods carrying capacity led to price rise-Assocham

New Delhi, Jun 28 (UNI) The biggest contributory factor in the sharp increase in transportation cost is not fuel price rise but forced reduction in carrying capacity of vehicles, according to an analysis carried out by ASSOCHAM.

The analysis said that carrying capacity of all types of vehicles generally came down by 30 to 40 per cent following the apex court ruling wherein it was mandated that the Gross Vehicle Weight (GVW) of commercial vehicles as registered should be implemented and the concession granted to transport operators by different state government on relaxation of GVW is to be considered bad in law.

Releasing the analysis, ASSOCHAM President Anil K Aggarwal said the shortage of transport vehicles has led to freight cost increases of around 25-30 per cent. Therefore, the total increase in freight cost due to the reduced carrying capacity of vehicles is nearly 100 per cent.

The diesel price increase in the last few months averages 7 per cent and would have an impact of 3 to 4 per cent in freight cost.

The Chamber has, therefore suggested that the ruling be reviewed in the interest of common man. It is also of the view that if the government does not take corrective measures, the price rise will go beyond manageable limits which will have severe adverse impact on Indian agriculture sector which in 2005-06 registered an impressive annual growth of 3.7 per cent due to which, the overall GDP grew by 8.4 per cent.

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