Tuesday, August 20, 2013

Rail Tariff administration to be set up through executive alignment

The government is discovering the likelihood of expediting the formation of the Rail Tariff administration (RTA) through the executive path after the proposed regulatory body obtained an in-principle nod from the Cabinet.

"RTA has got in-principle acceptance from the Cabinet. But since setting it up through an Act of Parliament will take some time, the Law Ministry and trains will examine if it will be set up through an executive order," regulation Minister Kapil Sibal notified reporters here on Friday.

The regulation Ministry and trains will work out minutia for the formation of RTA, the first-of-its-kind body for the national transporter, to periodically suggest tariff levels for both freight and passenger fares taking into account input charges (diesel, electrical energy) and volatile market conditions.

RTA will be a five-member body headed by a head person.

"We need to take it ahead through boss action," Sibal supplemented.

The administration, mooted by former Railway Minister and Trinamool Congress MP Dinesh Trivedi in his Rail allowance for 2012-13, was pursued by his successors CP Joshi, Pawan Kumar Bansal and present incumbent, Mallikarjun Kharge.

The need for setting up the RTA, which is proposed to be immune from political interference, has been sensed due to a increase in the cost of running teaches and the need to insulate the teaches from hikes in fuel and electrical energy charges. One of its objectives would furthermore be to eradicate uncertainties in tariff formulation.

The cross subsidisation for passenger services had gone up to Rs 36,000cr in 2012, which was decreased to Rs 32,000cr after the latest hike in passenger fares and cancellation allegations.

In 1950, Railways was earning 47 per hundred of its income from travellers, which is down to 27 per hundred now. Freight profits account for 67 per hundred of incomes at predispatched.

trains had dispatched the plan for the RTA to different ministries, encompassing Finance, searching their outlooks on the proposed body before submitting it to the Cabinet for its nod.

The major Miniter's agency, too, was constantly impelling the proposal for the setting up of RTA.

Currently, Railways has fuel change component (FAC) principle which is linked to power and fuel charges and calculated accordingly. The FAC for both freight and passenger fares is slated to be reviewed every six months.

While freight rates have gone up by about 5.7 percent from April 1 due to the connecting of FAC in the tariff, trains will in October examine its applicability for traveller services.

In fiscal 2013-14, the deregulation of diesel charges for bulk users, such as Railways, will add Rs 5,100 crore to the public transporter's costs. The trains will soak up the Rs 850 crore increase in passenger costs on this account.

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