Railways form tariff authority to decide fares

With Mamata Banerjee's Trinamool Congress out of the government, the railway ministry seems to have decided to slowly but surely reverse the populist policy of no fare increases. As a first step in this direction, Railway Minister C P Joshi on Monday decided to set up a Rail Tariff Authority.

The new body to determine train fares will be similar to what former railway minister Dinesh Trivedi had proposed. The move is also seen as an attempt to undermine the discretionary power of railway ministers (or their party leaders) in deciding rail fares. "The authority will give us an idea on how to determine fares and freight rates, and to what extent," Joshi said.

The cabinet will soon decide on whether the authority would be a regulatory or recommendatory body, the minister said.

The minister has also agreed to consider the recommendations of the high-level panels on railway modernisation and safety, headed by Sam Pitroda and Anil Kakodkar respectively.

"Safety and modernisation are the need of the hour. I am aware of the two important reports," Joshi said.

Though the two committees had recommended fund infusion from outside, they had also advocated fare hikes to pay for safety and modernisation upgrades. The recommendations of both panels set up by Dinesh Trivedi were junked by Mukul Roy, who replaced him.

Joshi declined to directly comment on a query on whether passenger fares, which have remained untouched for the last 10 years, would be hiked. "We have agreed to set up this authority, so let us take one step at a time," he said. The rollback of the fare hike has cost the Railways Rs 4,027 crore in projected earnings, throwing revenue calculations for this year out of gear.

The new authority will also look into ways to delink fares from recurring fuel price hikes by introducing a fuel-adjustment component. "We need to insulate ourselves from fuel hikes. As it is, the cost of running these services has become unviable," Railway Board Chairman Vinay Mittal said. A working group has been formed under Mittal to draw up the authority's composition and powers.

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