Railways Ministry to setup Rail Tariff Authority

The railways face a precarious financial situation because of low passenger fares and rising costs;there is a strong need to raise fares and freight rates to match the rise in input costs including rising diesel prices

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The ministry of railways has decided to constitute the Rail Tariff Authority and will send the proposal to the cabinet shortly, CP Joshi, minister for road transport & highways and railways said on Monday.

The proposal was mooted at the 2012-13 Railway budget by Dinesh Trivedi, who was later removed by his party leader Mamata Bannerji as she was upset with proposals to raise fares.

Her departure from the coalition government has paved the way for taking long-pending decisions. "After consultation we have decided to constitute Rail Tariff Authority. The formal structure - whether it will be a regulatory authority or will just be recommending fares is a matter of decision to be taken by the cabinet through discussion," Joshi told the Economic Editors' Conference on Monday.

The railways face a precarious financial situation because of low passenger fares and rising costs. "It is necessary to insulate the Indian Railways from various hikes that have been affecting its operations.

It has been principally agreed to create the Tariff Authority and we are moving in that direction," Railway Board Chairman, Vinay Mittal said.

Mittal refrained from commenting if the Indian Railways will raise tariff this fiscal in the interim, however, he said that there is a strong need to raise fares and freight rates to match the rise in input costs including rising diesel prices.

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