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Faring better | The Indian Express

Namdeo Dhasal’s poetry dared the reader to look reality in the eye. It also offered a redemptive vision. A rail tariff authority was long overdue. Its recommendations must be made mandatory. One of the early boons of the Union railway ministry moving out of the hands of the Trinamool Congress was the announcement by then railway minister C.P. Joshi that a Rail Tariff Authority (RTA) would be set up. While this decision had been long overdue, the urgency of rescuing railway fares from the grip of serially populist railway ministers had only grown. More than a year later, the Union cabinet looks set to clear the way for an interim RTA through an executive order, thereby setting up India’s first tariff regulator for the railways. However, the interim RTA would not have mandatory powers and its price-setting will not be binding on the Indian Railways (IR). This will leave the task unfinished. As long as the RTA’s recommendations are not made mandatory, tariffs cannot be genuinely de-linked from political considerations. Two, setting up a tariff authority is not enough — it must have the autonomy to rationalise fares indexed to fuel costs. A sequence of railway ministers who had milked the IR for political mileage — in the process ruining its efficiency and safety records while keeping it chronically under-invested in — has left the railways with few resources. The need for safety as a mass transporter and for modernisation into a lean and efficient entity implies IR needs to borrow and make money. The Sam Pitroda- and Anil Kakodkar-led high-level panels had recommended the infusion of money from outside and fare hikes. And, general-class passengers, in whose name fares had been kept unaltered, constitute 95 per cent of traffic. That is one of the important factors adversely affecting IR’s operating (cost-return) ratio. To get past such longstanding bad practice, IR needs an independent price regulator. Moreover, the process of price-setting needs to make transparent hidden costs, which take the form of unviable lines, myriad subsidies and systemic inefficiencies. Nobody would argue that the IR needs to junk its social service obligations. But it should get out of everything else that is not economically viable — like running hotels, bottling plants, eco-parks, sports academies etc. The RTA is necessary to enforce the good practice of cutting waste and making money. But it is only the beginning.
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