Cabinet to consider Rail Tariff Authority proposal soon

New Delhi: A Rail Tariff Authority to free fare revision from political interference is likely to be set up as an advisory body and a notification for it is slated to be issued shortly.

The notification will be followed by an amendment in the Railways Act, 1989 in Parliament to set up the first pricing regulatory body in rail sector.

  Cabinet to consider Rail Tariff Authority proposal soon

New rail tariff body soon. Reuters

The proposal for setting up the RTA is slated to come up for discussion before the cabinet this week, said chairman Railway Board Arunendra Kumar.

The legislative measure will be taken up after the cabinet approval, he said.

The five-member RTA will be headed by a chairman and will recommend revision in passenger and freight fare structure from time to time taking into account increasing input cost and volatile market conditions.

The cabinet is also expected to approve formation of a search committee for appointing RTA members and its chairman.

Cabinet secretary and Railway Board chairman are members of the search committee.

However, the RTA's recommendation will not be mandatory for railways as, according to existing law, only the Railway Board, and not any outside body, can fix the tariff.

RTA will be given mandatory powers only after the amendment of the Railway Act, 1989, in Parliament which is unlikely to happen in the UPA-II regime whose term comes to an end in a few months.

The next government will initiate the process of making RTA a mandatory body by amending the Railway Act, 1989 to insert a sub-section called Chapter 5 (A).

The RTA, mooted by former Railway Minister and Trinamool Congress MP Dinesh Trivedi in his Rail Budget 2012-13, was pursued by his successors CP Joshi, Pawan Kumar Bansal and the present occupant Mallikarjun Kharge.

The need for setting up such an authority, which is intended to be immune from political interference, has been felt because of rise in cost of running trains and the need to insulate the railways from hikes in fuel and electricity and eliminating uncertainties in tariff formulation.

In 1950, railways was earning 47 percent of its revenue from passengers, which is down to 27 percent now.

Freight earnings account for 67 percent of revenues at present.

As a result, the passenger service is cross-subsidised from freight earnings and currently it is hovering around Rs 26,000 crore a year.

PTI

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Updated Date: Dec 21, 2014 02:54:25 IST