Tuesday, Oct 21, 2014

Cabinet to soon take up Rail Tariff Authority proposal

Written by Express News Service | New Delhi | Posted: July 6, 2013 5:03 am

The process to set up the much-awaited Rail Tariff Authority (RTA) is likely to reach the Cabinet by this month and depending on the nature of powers it is vested with,may be introduced in the Monsoon session of Parliament for a formal nod.

“Constituting Rail Tariff Authority is a priority for us. The inter-ministerial note is in circulation and we are expecting the response in about a week,” new Railway Board Chairman Arunendra Kumar said on Friday.

Prime Minister Manmohan Singh had recently given the Railways a deadline to expedite the formalities of the process and put it up before the Cabinet. A review of the fares is due in October with regards to imposition of a variable fuel-adjustment component,regardless of whether there is an RTA or not.

The Railways has proposed a structure that vests little more than mere recommendatory powers to the authority. “The final call will be taken by the Cabinet after the inter-ministerial consultation,” Kumar said. If the RTA eventually has powers that make its recommendations binding on the national transporter,it would require an amendment to the Railway Act. On the other hand,setting up of a mere advisory body would not require the approval of Parliament.

Sources said if the matter reaches Parliament,chances of the RTA getting set up this year would be bleak because it could be referred to the Standing Committee on Railways as well.

Earlier this week,Railway Minister Mallikarjun Kharge reportedly told reporters in Bangalore that there would not be any fare hike this year and that the Railways would absorb the additional hike in fuel prices. However,if the RTA’s recommendations become binding,the political dispensation will not have a say in the hiking of tariff — a first for the Indian Railways.

The RTA,a big ticket reform in rail sector which is the first-of-its-kind for the Railways,will suggest the level of tariff for both the freight and passenger fares from time to time taking into account the input cost (diesel and electricity) and volatile market conditions.

According to sources,the Railways has finalised the contour of the RTA and it is likely to be a five-member body headed by its chairman.

While the freight has gone up by about 5.7 per cent from April 1 due to the linking of FAC in the freight tariff. In fiscal 2013-14,the deregulation of diesel prices for bulk users,such as Railways,will add Rs 5,100 crore to the public transporter’s costs.

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