Planning Commission favours Tariff Regulator for Railways

By Staff
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Google Oneindia News

New Delhi, Sep 3 (UNI) Railway Minister Lalu Prasad may have scripted a spectacular balance-sheet for his ministry without effecting any hike in passenger fares during the last three years, but the Planning Commission is not impressed.

The Plan Panel is against the populism of the Railways, arguing against any further hike in upper class fares, and is also opposed to cross-subsidising second class fares beyond a point.

It is also at loggerheads with the charismatic Railway Minister on the setting up of a regulator for monitoring the fixation of fares for various classes.

The thinking in the Commission is that very high levels of higher class fares are diverting traffic to low-budget airlines and any further burden on this segment will be a blow to the potential of the Railways to generate larger volume of revenues.

This has been argued in the Approach Paper to the XIth Plan (2007-12), and planners continue to hold on to their own despite criticism from Mr Prasad, whose thinking is to make Railways a common man's transport.

''Rationalisation of passenger and freight tariff can also help in getting more freight traffic. Cross-subsidising passenger traffic through freight traffic, and within passenger traffic cross-subsidising second class fares by overcharging higher class of travel cannot be carried beyond a point because overcharged freight migrates to road and overcharged passengers to air,'' says the Commission.

To put railway fares on a rational basis, it is essential to establish a Rail Tariff Regulatory Authority (RTRA), it argues.

However, the Railway Ministry has opposed the move by already sending a ''Cabinet Note'' to the government.

The Prime Minister-headed Committee on Infrastructure (CoI), with the Plan Panel as the nodal agency, has a mandate for putting in place a regulatory mechanism for core sectors.

The Tenth Plan also suggests that the Railways should fix tariff on technical and commercial consideration. ''The pace of railway modernisation needs to be vigorously accelerated in the 11th Plan. A paradigm shift in provision and delivery of rail services is called for,'' points out the Approach Paper.

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