Railways Set For – An Independent Tariff & Safety Regulatory Authority
Railways Set For – An Independent Tariff & Safety Regulatory Authority – The regulator is part of the government’s reform agenda and will provide leg room to the railways minister to hike passenger fares on the basis of market conditions without fear of a political storm. A decision is expected by the end of the year.
Aiming to end the culture of populism by de-linking the fare and freight structure from political decisions, railway minister Suresh Prabhu has moved in with initiatives to set up an independent tariff and safety regulatory authority.
The regulator is part of the government’s reform agenda and will provide leg room to the railways minister to hike passenger fares on the basis of market conditions without fear of a political storm. A decision is expected by the end of the year.
Losses in the passenger segment earnings last year were estimated at a whopping Rs 29,000 crore, while the rail operating ratio (paisa spent against every rupee earned) has hovered alarmingly around 92% in past years. The fare versus freight ratio of the Indian Railways is among the most distorted, with freight earnings heavily continuing to subsidise fares. “Such a situation cannot be allowed to continue. The decision to set up a regulator is a step in the right direction and in consonance with the recommendations of several expert committees including the Sam Pitroda Committee and the more recent Bibek Debroy committee”, a senior official said.
“At a juncture when a generational shift in rail operations is being planned, the existence of an independent regulator becomes even more critical”, the railway minister said.
Besides determining the fare and freight structure, the regulator will monitor efficiency and passenger safety issues, while also acting as the arbitrator in possible disputes that may arise among private investors and the railways. “The existence of a regulator — coupled with other initiatives such as accounting reforms — will help create an enabling climate for private investors,” Prabhu said.
An initiative of Niti Aayog vice-chairman Arvind Panagariya, a draft bill to set up the rail regulator by amending the existing railways act has been prepared and is likely to be moved in the coming winter session of Parliament, sources said.
Source: Hindustan Times