Union Cabinet Introduces RDA to Manage Rail Tariff and Signs MoU with Bangladesh to Reduce Logistics Cost

Union Cabinet Introduces RDA


This Wednesday, the Union Cabinet gave green signal to RDA (Rail Development Authority) setup, which will receive Rs. 50 crore corpuses to operate in radius of the Railway Act 1989. RDA will decide rail tariff for keeping the stakeholder investments for railways a fair affair. The members and chairman of RDA will serve of at least five years term.  This responsibility was earlier upon the railway board.

With BJP emerging victorious in Uttar Pradesh, the government is now prepared to dismantle the current way of rail tariff fixing that will cost it Rs. 35,000 crore but in long-term, bring greater returns and discipline in the railway sector.

A notice in this regard shall come in a week for convening of search-and-selecting committee, with RDA plans to start from August 1, 2017.

  • RDA will direct performance standards and rail efficiency protocols, suggest steps to absorb newer technologies, offer frameworks for bias-less access to infrastructure to dedicated freight corridor, and involvement of human resource development.
  • It will also assist the government for taking necessary decision for operational issues and important policies such as that for enhancements and measure for non-fare revenue, services as per costs.
  • RDA will work to protect consumer interests, give rise to positive environ for investments, encourage development of market opportunities, and drive competition and resource allocation. It will also improve cost optimization of services.

Journey of RDA in Becoming Part of the Railway Sector

The decisions of Railway Development Authority will be independent of callousness or bias of service providers and monitor matters undertaken by public-private partnerships in the Indian railways. The railways had mooted the concept of such regulator in 2011 by a group of experts chaired by Rakesh Mohan, and the event returned in 2014 and 2015 under NTDPC (National Transport Development Policy Committee and a panel) then run by Bibek Debroy, respectively.

But 2015-16 Railway Budget, Suresh Prabhu (the railway minister) announced orderly development of infrastructure that can allow competition in regulation mechanism. So with the rail tariffs duly taken care of, the competition to railways sector from other modes of transport may surely stabilize.

Other Deals and Pacts Aligned for Logistics Sector in India

Apart from the step of introducing RDA, the Union Cabinet also agreed on proposal about cooperation between Bangladesh and India on areas such as passenger cruise services, mass media, and judiciary, while with France it signed a deal for civil aviation and closed on Mahatma Gandhi Pravasi Suraksha Yojana.

A pact on fairway development between India and Bangladesh was also sanctioned for developing Siraganj-Daikhawa stretch for Jamuna River and Ashuganj-Zakiganj stretch for Kushiyara River. This MoU will help in reducing logistics cost along North-eastern India for cargo movement. It will also lessen congestion at narrow stretch of land at Siliguri Chicken’s Neck corridor.

Last month, a MoU was approved for greater cooperation for navigation and marine aids for vessel traffic service, lighthouses, and beacons. Further deals are expected to protect waterways of Indo-Bangladesh routes with investments in energy sector, which will in turn benefit logistics of both the countries.


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