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India
06 Apr 2017

Railways: Massive changes imminent as Centre approves regulatory body

The Union Cabinet has approved the setting up of an independent regulatory body for railways which will oversee fares and recommend necessary changes.

Though it could only recommend, it might push forward the revision of fares, which have remained unchanged for over a decade.

High subsidies led to an annual loss of Rs. 36,000cr for the railways.

In context

Railway fare might increase after independent body formation
Centre to form panel by August 1

Body

Centre to form panel by August 1

The authority, for which a budget of Rs. 50cr has been earmarked, will be set up by August 1.

Experts from different areas will be engaged. Its independence will be ensured by a separate budget and a strict appointment and removal process.

The chairman and three members will have a three-year tenure; the Centre will choose from a list of nominated names.

Fares

Passenger fare likely to increase after a decade

Passenger fares are likely to increase, though freight rates are likely to come down; transparency would remain a key aim.

The body will frame guidelines on benefiting the common people through subsidies or social services, which will be supported by higher-income groups.

It will also set standards of performance, and keep an eye out for deviations from such standards, to ensure greater customer satisfaction.

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Boon for private players

The panel will aim to establish a level playing field for private players; uncertainties and frequent policy changes have till now kept private investment low. It will make recommendations on investment, ensure adequate safeguards for PPP investors, and resolve disputes over agreements in the future.

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