Government of India has recently approved setting up an independent rail regulator that will be responsible for recommending passenger fares, setting performance standards for rail operations and creating level playing policy for private sector participation. Ministry of Railways had brought out a concept paper for public consultation on setting up of Rail Development Authority of India. Based on inputs received from stakeholders, a proposal for setting up of Rail Development Authority (RDA) has been approved by Government. This is among the most significant reforms to an infrastructure system undertaken by the government. The move will improve the services offered to passengers, provide comfort to investors in the rail sector and will enhance transparency and accountability.
RDA’s envisaged functions pertain to the following aims and objectives:
- Pricing of services commensurate with costs
- Enhancement of Non Fare Revenue
- Protection of consumer interests by ensuring quality of service and cost optimization
- Competition, efficiency and economy
- Market development; creation of positive environment of investment
- Benchmarking of service standards against international norms
- Providing framework for non-discriminatory open access to Dedicated Freight Corridor
- Absorption of new technologies for achieving efficiency and performance standards and
- Human resource development to achieve any of its stated objectives.
Rail Development Authority, comprising of a Chairman and three Members, with an initial corpus of Rs. 50 crore, will be based in Delhi; will act within the parameters of the Railway Act, 1989 and shall make recommendations to Government for appropriate consideration/decision. RDA will frame principles for social service obligation, will fix efficiency standards and resolve disputes related to future concession agreements. It will also collect, analyze and disseminate information and statistics concerning the rail sector. RDA would be free to recommend fares and freight rates. It would rationalize the entire fare structure for the railways. It will keep rationalizing fare as per market demand. It’s a bold reform move; an independent, empowered regulator could be the paradigm shift that is needed.
RDA would have to ensure that the resources of the system are optimally utilised, overcoming existing inefficiencies that arise from the fact that policy, regulatory and management functions of the railways are intertwined. Indian Railway passengers aspire for a modern system that offers high-quality travel with low risk of accidents, while industry wants smooth freight transfer. With setting up of RDA there are expectations that the system would be able to move both people and freight faster. Technology upgrades are also essential to raise carrying capacity, service frequency and speeds, besides increasing employment.
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