The Hindu : Rly. monopoly in fixing fares to end?

Online edition of India's National Newspaper
Sunday, Jul 27, 2003

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National

Rly. monopoly in fixing fares to end?

By Alok Mukherjee

NEW DELHI JULY 26. A standoff has developed between the Planning Commission and the Railway Ministry which could ultimately result in ending the monopoly of the Railways in fixing fare and freight rates.

The contentious issue is about the setting up of a Rail Tariff Regulatory Authority (RTRA) before which the Railways would have to make a case for rationalisation of fare and freight rates. And, like any independent regulatory authority, the RTRA would also consider the consumer's viewpoint while fixing the rates.

The proposal for the RTRA is included in the "Priority Agenda for Action for 2003-04" which has been jointly drawn up by the Planning Commission and the Prime Minister's Office. Expectedly, the Railway Ministry has objected to the setting up of the RTRA on the ground that under the Railway Act, 1989, the Ministry has full powers to fix tariff rates and that the existing statutory provisions do not permit the setting up any autonomous regulatory authority.

However, the Railway Ministry's objections came in too late to be included in the draft priority agenda which was sent to the Prime Minister's Office for approval.

The Planning Commission's view, on the other hand, is that the issue relating to the RTRA was mentioned in the mid-term appraisal of the Ninth Five Year Plan and it also found a place in the Approach Paper to the Tenth Five Year Plan to which the Railway Ministry did not object.

The Rakesh Mohan Committee which went into the restructuring of the Indian Railways also recommended the setting up of a RTRA. The Planning Commission, therefore, feels that since the Tenth Plan has been approved by the National Development Council and since the proposal for setting up a RTRA is included in the Plan, action on this has to be initiated.

The Commission has also highlighted the fact that at the time of finalisation of the draft priority agenda for action, the proposal for the RTRA was brought to the notice of the Railway Ministry during the discussions.

The Ministry had at that time indicated that it would come up with a formal response shortly but the response came after two months by which time the draft priority agenda had been finalised.

The Railway Ministry, however, maintains that it had earlier written to the Planning Commission that the references in the draft Tenth Five Year Plan pertaining to recommendations of the expert group of railways (the Rakesh Mohan Committee) may be deleted as the RTRA was part of the recommendations of this group.

But with the RTRA proposal now included in the Tenth Plan and the "priority agenda for action", the Railway Ministry has included rationalisation of fare and freight rates as a priority item for implementation but has not mentioned the mechanism to achieve this rationalisation.

A final decision has now been left to the Union Cabinet.

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