In the backdrop of several committees recommending an independent rail regulator, especially for fixation of freight and passenger tariffs, the Railway Ministry is all set to form a Railway Development Authority (RDA). The RDA, likely to be formed to look into railway reforms during the decade along with the tariff structure, will be brought in by replacing the existing Railway Regulatory Authority (RRA).
The setting up of such an authority is also crucial for attracting private investment in the railways as to ensure fair play for entities. Ministry sources said that Railway Minister Suresh Prabhu has set the ball rolling to turn it into reality and has suggested that the regulator’s functions should include laying down the framework for monitoring of passenger and freight tariffs, all the Public Private Partnership projects and its efficiency too.
“There is a proposal to change the nomenclature from Railway Regulatory Authority to Railway Development Authority and make it broad based,” a Railway Ministry official said.
The railways will seek suggestions from all stakeholders, including the public, on constitution as well as broad-basing the functioning of the authority. The official said the draft of regulatory authority is ready and it will be circulated soon to seek views from all concerned.
“Though the task of suggesting freight and passenger fares will remain to be vested in the authority, there will be additional responsibilities as well,” he added.
At present, fixing tariffs is the Railway Board’s job. Historically, political dispensations have prevailed over the Board to stall moves for tariff revision fearing political backlash. As per the plan, public transporter will constitute the authority as an independent body, to decide passenger fares and freight rate, as a shift of regulatory responsibility from the government to an independent regulator is required to attract private sector investments.
“Besides fixing fares, it will also have efficiency parameters. The finalised draft will be tabled in Parliament for approval,” added the official. Indian Railway is currently under strain because of lack of investment in critical areas and a decline in passenger bookings.
Besides, the 7th Pay Commission recommendations has also added a significant burden on its finances for which Prabhu has sought help of Finance Ministry to address the issue of pay panel burden of about `32,000 crore.