Union Cabinet approved to set up Rail Tariff Authority

The Union Cabinet approved to set up Rail Tariff Authority on 20 January 2014. Rail Tariff Authority will be an advisory body which will advise the Railway Ministry on fares. RTA will comprise of a chairperson and four members at the apex level.

At present railway fare and freight rates are set by the Railway Board in accordance with the Railway Act, 1989.

The Rail Tariff Authority functions include

• It will recommend fare revision from time to time taking into account input cost and market condition.
• It will aim to develop an integrated, transparent and dynamic pricing mechanism for the passenger and freight segments of the Indian Railway’s business.

• It will help the government to generate requisite surpluses for growth in the future.  

RTA will be the first external pricing regulatory body for the country’s rail sector. The RTA will be given mandatory powers only after the amendment of the Railway Act, 1989 by the Parliament.

The RTA will make recommendations to the Railway Ministry which usually will have to accept it. If in case Railway Ministry disagrees, the ministry will send the recommendations back to the RTA to review its decision.