The Union Cabinet approved a proposal on April 5, 2017 for setting up an independent regulatory agency for railways which will recommend revision of tariffs.
This is intended to depoliticise the revision of passenger fares.
After merging the railway budget with the Union Budget, the move is seen as another step in reforming the state-run transporter.
It also aims at making the process of revision of both passenger and freight fares transparent.
The regulator will have only recommendatory powers, but it could pave the way towards revising passenger fares, which are at present highly subsidised.
Freight rates are likely to come down as the cost is likely to be balanced against higher passenger fares, officials said. S
The regulator will lay down principles and rules for determining tariff in passenger and freight segments in a transparent manner.
The regulator will also ensure fair play and a level playing field for private or foreign players.
Private investment in the railways has been low be cause of uncertainties and frequent policy changes.
The regulator will also lay down standards for efficiency and performance which will lead to customer satisfaction in both passenger and freight services.
The authority will also be mandated to check deviations, if any , from the laid-down performance standards and suggest remedial measures which will empower customers -both passengers and freight operators.
The authority will also suggest guidelines for determining track access charge which will ensure better utilisation of dedicated freight corridors.Railway Regulatory Agency: Know More
- The authority, to be set up by August 1 this year, will have a chairman and three members and can engage experts from different areas.
- The government chose the executive order route to ensure setting up of the regulator at the earliest, said an official.
- The independence of the regulator will be ensured through a separate budget and a stringent appointment and removal process for the chairman and members.
- The appointment will be done by the Centre from the panel of names recommended by the search-and-selection committee headed by the cabinet secretary and the rail board chairman, DoPT secretary and chairman of any other regulatory agency nominated by the cabinet secretary as members.
- The chairman and members will have a tenure of five years and can be removed by the Centre on grounds such as insolvency , conviction, misbehaviour, physical and mental incapability.