A rail regulator is coming up to recommend passenger and freight fares

The Modi Cabinet has approved the setting up of an independent rail regulatory authority, which would determine passenger and freight tariffs and make sure that there is no foul play involved. It would also ensure impartiality for private players that want to invest in the railways.

This would be the biggest and first-of-its-kind reform in the Indian railways.

Formulating this Rail Development Authority (RDA) would mean an improvement in the services that passengers get and comfort that investors seek, along with increased transparency and accountability

The cabinet has decided that the RDA will be formed through an executive order of the government. It would be provided with an initial fund of Rs 50 crores.

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Responsibilities given to RDA will include tariff determination and recommending principles for classification of commodities, framing principles for social service obligation and guidelines for track access charge.

RDA’s job would also include suggesting the ministry regarding policies for private investment so that PPP investors get reasonable protection. It would also be authorised to resolve disputes over future concession agreements.

Since 2001, the need of such a rail regulator has been stressed upon several times and by various committees, including Expert Group under the Chairmanship of Rakesh Mohan in 2001, the National Transport Development Policy Committee (NTDPC) in 2014 and Bibek Debroy's Committee in 2015.

The authority will comprise of one Chairman and 3 members, while it would be free to engage experts from relevant areas. Their appointment will be done by the central government, while the panel of names will be recommended by the Search and Selection Committee, including Cabinet Secretary as Chairman, Railway Board Chairman, Secretary, Department of Personnel and Training, and Chairman of any Regulatory Body of central government nominated by the Cabinet Secretary.

(Image source Youngisthan)