Call for setting up Rail Traffic Authority

NEW DELHI, JULY 20. The Planning Commission has taken the Railway Minister, Ms. Mamata Banerjee, to task for not fulfilling the promise of restructuring the passenger fare and freight structure.

Setting the agenda for the Railway Minister, the panel said phased adjustment of the tariff over the next two years was ``absolutely crucial'' and called for setting up a Rail Traffic Authority on the lines of the Telecom Regulatory Authority of India to fix tariffs without any political pressure.

``The 2000-2001 Budget speech of the Railway Minister indicates a five per cent increase in freight rates.

Although the latest Railway budget claims to have rationalised the fare structure, no tangible steps have been taken in this direction.

On the contrary, the decision of not increasing the second class fare or increasing it marginally during the first three years of the Ninth Plan and consequently sparing more than 90 per cent of inter-city passengers from any fare increase implies that cross subsidisation has actually increased,'' the Commission noted in its mid-term appraisal of the railway sector.

The bane of the Railways has been that freight rates are increased in order to make up for the loss incurred in operating passenger services.

As a result, a considerable chunk of the traffic that could have accrued to the Railways goes for the road option.

The lopsided passenger fare and freight rate has been vividly brought out in the Planning Commission's appraisal.

Passenger services in `99-00 were estimated to account for 59 per cent of the total traffic but contributed only 30 per cent of the revenue.

Freight services on the other hand constituting 41 per cent of the total traffic generated 70 per cent of the railways' income during any given year.

But the Railways management headed by Ms. Banerjee remained oblivious to these findings.

She increased freight rates by five per cent in the latest budget and left passenger rates untouched despite the fact that freight rates were increased by four per cent in `99-00 and a whopping 12 per cent in `97-98.

In these circumstances, the panel regretted that ``no significant progress had been made to rationalise fares and align passenger fares more closely with cost to reduce the extent of cross- subsidisation''.