Probably for the first time IR is facing the real competition from the energy guzzling Road and air transport. Finance ministry have already refused for special bailout package. With IR finances already stretched to limit, the options of fare increase for additional revenue generation are getting very limited with every passing day:-
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(1) Indiscriminately increasing freight tariff & upper class tariff and minimal or no increase in non ac fares had been the strategy of RMs since several decades to shore up necessary revenues for IR and maintaining the vote bank at...
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the same time. With freight offerings much lower than targeted figure and more freight transport going to Road due to reduction/ elimination of checkpoints with implementation of GST, IR is not in a position to raise freight charges.
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(2) Non ac general fares which are heavily subsidised are not likely to be touched or at the most a minimal increment (not significant) may be done keeping in view UP elections and hyper critical behaviour of opposition parties at present, especially after demonetisation.
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(3) ACII, ACI fares are very close to the air fares and any significant increase shall mean loss of these paxs to air. For example there are about 10,000 daily airline paxs. each way between Delhi-Mumbai which is much higher than total number of upper class rail paxs on the IR on that route. It means IR has at already at disadvantage.
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(4) SL, ACIII, ACC class paxs are likely to bear the brunt of price rise. It is reported that flexifare scheme adopted for Raj/Shat/Duro trains may be extended to all Express/SF trains. Presently bus (esp luxury) services are not so prevalent and exists in limited sectors and in a limited scale. This step shall offer a great opportunity to expand, which bus operators shall grab with both hands, as the flexi fares shall render the ac/ nonac seats/berths in luxury bus much more cheaper than the Flexifare ACIII, ACC classes of IR. They will have opportunity to operate more and more buses with more comforts (including toilet facility), better interiors, convenient pickup/drop points, and cheaper costs due to enhanced volume of passengers. Thus ACIII, ACC paxs shall also be weaned away from IR in addition to ACI, ACII, EC.
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(5) A new super cost effective competitor is in process of making i.e. river water/ coastal shipping which is much more cost efficient for bulk goods movement which presently is forte as well as bread & butter of IR.
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(6) Above points indicate that IR is under fire of competition from various competitors which are in general better managed than IR and are ready to poach upon almost all kinds of clientèle/ traffic of IR. IR cannot survive for long, if it continues with its old & traditional ways of working. Radical changes are required to drastically improve its efficiency in each & every sphere of its activity so that it can maintain its market share and rather regain a portion of lost market share. Sooner it happens, the better for IR.