The Railways is set to go to the Cabinet next month with a proposal to create a regulator for the rail sector through an executive order. With the NDA government failing to push several key Bills through Rajya Sabha, Railways for now has abandoned the idea to setting up a regulator through an Act of Parliament.
The ministry has received legal opinion which says that the regulator, which is likely to be named Rail Development Authority of India, can only have recommendatory powers in matters of setting tariffs (fares and freight rates) as the Railway Act mandates that only the central government can set tariffs for the country’s rail sector.
Giving tariff-setting powers to the regulator right now would entail going to Parliament with a Bill to amend the Railway Act, which Railways is not keen to do at the moment.
Setting up the regulator through an executive order will enable Railways to bypass the process of amending the Railway Act, which in the present scenario could cause unnecessary delay, sources said. The ministry has set an internal target of June to send the note to the Cabinet seeking approval.