Cabinet approval for Setting up of a Rail Tariff Authority (RTA) a Welcome Change!

New Delhi:  There is welcome change of track at the railways going forward, with the Union Cabinet approving the setting up of a Rail Tariff Authority which now, make tracks for Railway reform after long years of wanton populism in tariff setting and sheer giveaways, an independent assessment and the proper fixation of user charges, to speedily modernise and overhaul the railways would now be in place.

As India picks up economic speed, we do need efficient tariff setting to boost the quality of rail services, improve safety and purposefully step up much-needed investment.

However, it remains to be seen whether the role of the RTA would merely be of an advisory or a recommendatory nature, which would defeat its purpose. What is required are binding provisions in law for arm’s-length pricing of rail services. The required legislative changes surely need to be effected and notified without delay.

Besides, it is possible that the RTA, with its members presumably superannuated bureaucrats, would opt to keep fare revisions in abeyance never mind costs, simply to please the powers that be. Note that such a stance has been par for the course in other regulatory bodies, in power for instance, with rates conspicuously unrevised year after year.

Hence the need for regulatory accountability; there must be clear-cut provision in the RTA Act for its members to be periodically subject to scrutiny by select parliamentary committees, and through them, the wider public. The massive cross-subsidisation of passenger fares by freight rates, which now amounts to over Rs.32,000 crore annually — or about a third of the rail budget — needs to be rationalised. The practice of jacking up freight rates to heavily subsidise passenger travel actually leads to high costs right across the board. We need to put paid to such muddled populism. Fast.