Considering the following 3 facts:
(1) AC class services being offered by IR is already slightly over priced as compared to their economic value and charges offered by low cost airlines/ luxury buses/taxies.
(2) Although fares of second classes are very low (one of the lowest in world), the quality of services (crowded cattle like travelling) offered is also very poor. If we compare the economic value of the services vis-à-vis the bus fares, the current subsidy of over Rs. 30000 crore may actually be lesser say Rs. 20,000 crore.
(3) The...
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freight charges (major source of revenue 2/3rd part) are also exorbitantly high (one of the highest in the world) to cross subsidise the pax losses. Consequently higher prices of goods in country badly affects poor as well as the rich. As a result freight traffic is shifting to inherently costly but better managed road/airline operators.
It is clear that for over all traffic carried (freight+ac paxs+non ac paxs) IR services are not under priced but over priced. Inspite rail transport being much more cost effective, monopolistic IR is still struggling with salary+pension expenses swelling to an untenable level of 68% of total revenues earned. Loan repayment is a big problem.
At this stage IR definitely need a regulating authority with sufficient powers to provide necessary directional changes urgently needed for IR management. This committee must have representation from Govt/IR, Private sector, Public sector so that the good practices of all can be combined in the decision making for the betterment of IR.
Rail transport, the most cost effective mode of transport is supposed to be back bone of Indian Economy. It was duly playing a stellar role at the time of independence and provided much needed strength to the Indian Economy with a freight/passenger share of 89%/74%. Set up of million plus employees under Rly Ministry has been involved in managing/doing A-Z affairs of the monopolistic IR since last 7 decades. It has very badly lost (inspite of inherent advantages) its share to inherently costly road/air transport with current share as low as 30%/15%. This has resulting in high fuel consumption & high cost of logistics (14% of GDP) in India, hereby as against desired level of under 10% thereby causing a huge loss of over 5lac crore Rs to Indian economy. Higher logistic cost is predominantly a result of inability of to carry the traffic offered by growing Indian Economy, and is a setback to our targets of achieving high growth in foreign trade/ industrial & agricultural production / employment generation etc.
In order to use rail transport to best use for industrial/agricultural development of nation and to provide best & reasonably priced services to people/ industry, an independent and suitably powerful regulator is a must. At this stage, Improvement is a must, whether done by competition of IR with private sector or without. The sooner the better.
Parliamentary route is the ideal method for a democracy, but today this route may prove to be too lengthy for the proposal to see the light of the day.