The Hindu Business Line : Railways plans body for pricing transparency

It would be responsible for analysing the costing mechanism of rail operations, trends within expenditure, linking the impact of various input costs with tariff, among others.

New Delhi , June 20

In order to bring about transparency in the manner of tariff fixation, the Indian Railways plans to set up a Bureau of Cost and Prices within the Ministry. The bureau, which would be like an autonomous body, would report directly to the Railway Board Chairman, said official sources.

It would be responsible for analysing the costing mechanism of rail operations, trends within expenditure, linking the impact of various input costs with tariff, amongothers. The exercise would be carried out for freight and passenger operations and could even by carried out on a commodity-wise basis.

The proposal, which has been cleared by the Board Chairman, would be presented to the Prime Minister's Committee on Infrastructure as well.

"A rail regulator has been a long standing demand of the Planning Commission to ensure transparency in pricing mechanism. This transparency would be achieved by this mechanism. We are trying to be a self correcting monopoly," the sources said.

To start with, an exercise has been undertaken to link the impact of fuel prices — electricity and diesel — with the tariff. The Railway Ministry plans to get the process validated by the Kolkata-based Indian Statistical Institute. Simultaneously, there would be an effort to improve performance efficiencies as well.

Rail price index

Moreover, the Railway officials are also talking about the possibility to formulate a Rail Price Index, which can be a notified figure — just like there is a Wholesale Price Index.

"Instead of trying to match the cost of haulage, non-rail operations and overhead expenses through tariff, we would try to mitigate non-core expenses by off-rail income," said a senior official adding that the off-rail income would include revenues from terminal facilities, catering and budget hotel.