Railways : Rail Development Authority


  • It will be an independent rail regulator.
  • HQ: New Delhi
  • Set up through an executive order
  • It will act within the parameters of the Railway Act, 1989. It will only make recommendations to the Railway Ministry which will take a final call on passenger and freight fares.
  • It will have a Chairman and three members with a fixed term of five years.
  • It will be allowed to engage experts from various fields


  1. Tariff determination: RDA will frame principles, recommend tariffs, principles for classification of commodities, frame principles for social service obligation and guidelines for track access charges on dedicated freight corridors.
  2. Ensuring fair play: It will ensure level-playing field for all stakeholders. It will propose modifications and send suggestions or advisory notes on investment in railways. It will also make suggestions regarding policies for private investment to ensure reasonable safeguards to PPP investors to ensure level playing field and resolve disputes regarding future concession agreements.
  3. Setting standards: It will help to set efficiency and performance standards and disseminate information in line with global best practices and benchmarking. It will also collect, analyse and disseminate information and statistics concerning the rail sector

Why RDA was needed?

  • At present, the rail tariffs were set by the Union government and were mostly based on political considerations especially in passenger segment.
  • As per provisional estimate, Railways losses had touched over Rs 30,000 crore in 2015-16 in the passenger segment due to sharp increases in input costs and no proportionate increase in fares over the same period.
  • Moreover, keeping rail fares within affordable limits has led to cross-subsidisation as the goods fares have increased considerably more than the passenger fares in the past.
  • The fare structure had distorted in the Railways network as the passenger fares are subsidised by goods fares which has led to increase in the freight tariffs, resulting in diversion to road sector.

What RDA will do?

  • RDA will improve the services offered to passengers, provide comfort to investors in the rail sector and enhance transparency and accountability.
  • It will help the Indian Railways to take decisions on pricing of services commensurate with costs, protect consumer interests, suggest measures for enhancement of non-fare revenue, create positive environment for investment, promote competition and encourage market development, promote efficient resource allocation and benchmarking of service standards, and suggest measures for absorption of new technologies and human resource development

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