Rail Tariff Authority(RTA)

by Dushyant Vazarkar · March 11, 2016

RTA will be a statutory body and the NDA govt. is in process of framing a draft bill. Recently, Railway Ministry has declared that RTA will be in place by FY 2019.

Reasons

Rail budget and revising rail fares is sensitive issue and politically it can affect on people. Railway Board is active to set up the tariffs for railways. And the railway passenger subsidy has reached to 25 thousand crore per year INR. It has been a substantial rise in the Rail tickets.

By keeping the rail tariffs away from the political influences, The RTA was proposed during the Manmohan Singh (Former PM of India) and UPA government rule which had approved that advise the Railway ministry In such a way that it become fare revision and freight revision for all the citizen throughout the country.

Functions of Rail Tariff Authority (RTA)

The main function of RTA is that it can accept the recommendations but somehow If it disagree then it would send the recommendations back to the respective authority which can review the decision and can have discussion on that later on.
Keeping all the stakeholders, Consumer groups, Container operators and Railway groups in mind, RTA would engage with all these groups before it advises the government on fares and rates for the rail budget.

RTA can have the power of increasing the freight sent in railway and also reduce the cross subsidization Instead of rationalizing the fare structures overall.

Objectives to setup for RTA

To advise the government on fixing of fares and freight of Railways. To determine and maintain the railway fares transparent so that it can not be misused on the other side with the people for whom Railway is a life line for travelling.

RTA will scrutinize the requirement and also engage with all the other people who are somehow related with rail budget. It should be the transparent and improved with the fare structures.

Hence, The railway budget and user expectation should match. The financial health of railways and its stability plays an important role to reduce the fickleness of revenue.

Current glimpse on RTA

Currently, Railway makes 23 paisa loss per passenger(per Km). Hence, It is a need to raise prices.

Interim budget announced in 2014, Setting up the Rail Tariff Authority (RTA). To advise the government on prices for both passenger trains and good trains, Depending on input cost and volatile market conditions. It will improve fare : freight ratio. It will reduce the cross subsidization between freight and passenger train operations.
Under the Railway Act, only the Railway Board can decide on the prices of rail services.

RTA has been established through an executive order (like UIDAI) But Modi’s rail budget is silent on this issue