Not going to help IR in long run. Unless the general class fares are increased substantially and subsidy brought burden down to reasonable levels, the find crunch is going to stay with IR.
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Why IR fail to understand is whether your increase the already high ac fares on the pretext of flexi-fares of Suvidha or special fares, or the linking it to inflation, the ac class paxs(ACI,ACII) shall continue to migrate towards airlines. Resulting in IR saddled with more and more loss giving nonac paxs.
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With huge development in the networks of express ways, a new competitor i.e. luxury buses is presently lurking in dark and may come into picture any time with a bang and poach ACIII,ACII class paxs.
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IR should evaluate the reason-ability of its fare vis-a-vis the facility given to pax and then think of raising fares suitably for different classes, rather than try to find a good sounding reason for lump sum increase fares.
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"The Indian Railways earns just 1 cent from each passenger as against 9.4 cents earned by the Japan Railways, 6.7 cents by the Russian Railways, 6.2 cents by the Deutsche Bahn (German Railways) and 2.7 cents by the Chinese Railways, says a 2012 World Bank study". By giving such data and trying to justify price rise, IR is befooling itself as well as the public. Quality of service given too have to be taken into account while comparing the earning per passenger. In the European countries most of the long distance trains are air conditioned and much faster than our shatabdies/ gatimaan. If we compare the earning per ac pax of IR with others, then it may be altogether a different story.