(1) Revenues from profit giving freight traffic and ac passenger traffic is consistently falling short of the target by about 10% since beginning of the Financial year. On the other hand CR carrying an impressive 2% annual growth in the highly subsidised suburban passenger traffic carried (and nominal 4% increase in revenue) in first half of current financial year. This contradiction is not a surprise.
(2) Highly subsidised non ac fares adopted by IR will continue to attract more and more passengers in these classes thereby increasing the losses of IR. On the other hand higher/special ac class fares shall compel the cash cow of IR (ac passengers) to switch over to economy airlines/ luxury buses.
(3)...
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Fares of different classes should be broadly based on the actual costing and actual economic value of services provided (based on cost of similar service provided by airlines/road operators of the service).
(4) Fares should be dependent on facilities which are appreciable to travellers space in coach, privacy,ac ,interiors, mob. charging, wi-fi, water filter, pantry/dining car etc, speed of travel, journey time, kms (telescopicity), complexity of terrain/ permanent way. A train facilitating non stop run between two end destinations say 250 km or more may also be considered as a facility to traveller.
(5) A pre determined subsidy may be given to lower classes, say 10-15% subsidy on non ac sleeper class, 15-25% subsidy in general class.
(6) In case of ac classes, a nominal profit margin of 5-10% may be added to economic value/costing.
(7) All concessions (especially in ac classes) need to be reviewed, Limiting max. level of concessions to 40% of base fares instead of 75%/ 100% concessions in vogue in some cases.
(8) Last but most important, urgency is there to critically review/analyse each and every operation of IR, then to devise strategies for optimisation of each activity with a view to improve safety and optimisation of resources consumed, and then to go for massive innovation/ modernisation/ cost control exercise so as to improve the competitiveness of IR wrt airlines/ buses/ taxies.