The efficiency factor would be introduced as a basis for calculating railway tariff revisions, apart from the fare and freight factors, Railway Minister Suresh Prabhu said on Wednesday.
In an informal chat with reporters in his office here, Prabhu said work was already in progress for setting up its tariff regulator that could be named the Rail Tariff Authority.
"We are in the process of creating an institutional mechanism, which will make recommendations on revision of fares and freight," he said.
"The committee in making its determinations will consider the factors of fare, freight and efficiency," the minister said, adding that the efficiency parameter was to be considered for the first time.
The tariff regulator is expected to lead an era of rationalisation of fares and freight structures for improving the fare-freight ratio and gradually brining down cross subsidisation between different segments.
Prabhu said the process of forming the regulatory body required consultations with the opposition before it was embodied through an act of parliament.