 "Process to form Rail Tariff Authority gathers pace")
Aiming to delink its financial health from politics, Railways has expedited the process for setting up a Rail Tariff Authority (RTA) and sought the views of other ministries before submitting the proposal to the Cabinet for approval.
According to sources, Railways has finalised the contour of the RTA and it is likely to be a five-member body headed by its chairman.
While a retired Railway Board member is being tipped to head the regulatory body, four other members from outside of Railways are being shortlisted.
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"The cost of running trains is becoming higher and the aim is to insulate the Railways from various hikes like fuel hike and eliminate uncertainties in tariff formulation," a source said.
There is a policy now and the fuel adjustment component (FAC) is linked with energy and fuel prices and calculated accordingly.
While the freight has gone up by about 5.7% from April 1 due to the linking of FAC in the freight tariff, Railways will examine its applicability in the passenger services in October.
FAC is slated to be reviewed for both freight and passenger fares and by that time the RTA is expected to be constituted, the sources said.
In fiscal 2013-14, the deregulation of diesel prices for bulk users, such as Railways, will add Rs 5,100 crore to the public transporter's costs. The Railways will absorb the Rs 850 crore rise in passenger costs on this account.