Cabinet nod for rail tariff regulator, fares may go up

Rail travel may become costlier with the Union Cabinet on Monday clearing a proposal to set up an independent rail tariff regulator to advise railways on fixing fares. 

The setting up of Rail Tariff Authority is seen as the first step towards depoliticizing rail fares and inducing reforms aimed at pulling the cash-strapped railways out of financial crisis. 

The authority will recommend fare revision from time to time after taking into account input cost and volatile market condition. 

"It will also advise the central government on fixation of tariff, based on cost of operations and factors impinging it, to help generate requisite surpluses for healthy growth in the future," said an official. 

However, the recommendation of the authority, which would be set by an executive order, will not be mandatory for railways as, according to existing law, only the Railway Board, and not any outside body, can fix tariff. 

The authority will be given mandatory powers only after the amendment of the Railway Act, 1989, in Parliament which is unlikely to happen during UPA tenure whose term set to expire in a few months. 

An official said, "The setting up of such an authority will institutionalize a regulatory mechanism at arms length for pricing of passenger and freight services." 

Railways is suffering a loss of around Rs 25,000 crore in a year on passenger segment as the fares were not revised over the years and have been kept low due to political considerations. 

The regulator will have a chairperson and four Members at the apex level and will be vested with the function to develop an integrated, transparent and dynamic pricing mechanism for the passenger and freight segments of Railway`s business.

Source:-The Times of India