The efficiency factor will be introduced as a basis for calculating railway tariff revisions, besides the fare and freight factors, Indian Railway Minister Suresh Prabhu said. This will be the first time that the efficiency parameter will be taken into account for establishing rail tariffs.
According to Suresh Prabhu, work is already in progress for setting up a tariff regulator that could be named the Rail Tariff Authority. The tariff regulator is expected to enable a rationalisation of fares and freight structures for improving the fare-freight ratio and gradually reducing cross subsidisation between different segments.
“We are in the process of creating an institutional mechanism, which will make recommendations on revision of fares and freight,” Suresh Prabhu said.
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