RailEnquiry

In a major move to keep tariff fixation at an arm's distance from operational and administrative functions of the Railway Ministry, the Union cabinet today approved setting up of Rail Tariff Authority which will determine freight and passenger tariffs for Indian Railways.The move is expected to depoliticize the passenger tariffs in the Indian Railways. The authority would be formed through an amendment to the Railway Act 1989.The authority would have five independent members including a chairman. It would interact with all stakeholders after bringing in proposals. Before notifying due consideration would be given to these submissions.The idea for Tariff authority was put up by former Railway Minster Dinesh Trivedi in 2012-2013. The idea was also highlighted as an area of priority for 2013-2014 in the budget speech of Pawan Kumar Bansal.Though the eventual notification for changes in tariff would be done by the Railways, an official said the authority would set strong guiding principles for changes and in that respect would be more than just a recommending body.Various experts have often criticized the ‘populist budget’ of Indian Railways where passenger fares are not hiked even when it makes bad business for Indian Railways. The Rail Tariff authority will be one of the first steps towards depoliticization of Indian Railways which ended on an operating ratio at 88.8% for the year of 2012-2013.

Bansal in his last budget had already taken out fare fixation out of the purview of Parliament by increasing tariffs prior to the Budget. He also introduced fuel surcharge in freight tariffs which is now expected to be extended to passenger fares.