At the fag end of its five-year term and almost a year after Parliament approved the proposal, the UPA-II Government has finally notified the formation of a rail tariff regulator, albeit an interim one.

On January 27, the Government notified the constitution of an interim rail tariff authority, which will develop an “integrated, transparent and dynamic” pricing mechanism.

Since it is common knowledge that the Railways subsidises passenger services from freight revenues, the Government has sought to make the regulator’s role challenging by asking it to suggest fare levels that ensure healthy surpluses for the Railways.

“The easiest thing for a regulator will be to recommend an increase in passenger prices and reduction in freight charges. But the Railways has a social obligation of moving passengers across the country,” said an official.

The tasks listed for the regulator include advising the Railways on all matters related to fixation of tariffs, such as passenger and freight services, including freight carried in privately-owned wagons, and track access charges, says the notification.

It will advise the Central Government on “fixation of tariffs of Indian Railways based on cost of operations and factors impinging on it, with a view not only to achieve its recovery, but also generate requisite surpluses for healthy growth in times ahead.”

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