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News Entry# 288509
Dec 13 2016 (16:25)  Rly to cut flexi fare by 20% to fill seats (
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News Entry# 288509     
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With its passenger turnout taking a hit due to the recently-introduced flexi fares, and the Finance Ministry not ready to come to the rescue of the Indian Railways, the national transporter has decided to bring down the ceiling of the much-hyped fare structure for premier trains — Rajdhani, Duronto and Shatabdi.
The Railway Board has decided that the highest fares in premier trains can go up to only 40 per cent, instead of the existing 50 per cent, ceiling after finalisation of the reservation chart. This is to attract more passengers, to fill vacant seats, and lure them away from air travel.
Railways had launched the flexi fares with much fanfare on September 9, claiming to enjoy the backing of the Prime Minister’s Office. The decision to tweak the dynamic fare system comes against the backdrop of the intense tug of war between the Finance Ministry and the Railway Ministry over generation of additional revenues through passenger fares. The Railways have argued that any further increase will only drive passengers to take to air travel and AC-II class will be severely hit.
“Vacant berths available after the finalisation of the chart will be offered at a price 1.4 times higher than the base fare instead of the current practice of 1.5 times increase,” explained a senior Railway Ministry official. No change has been made in the fare for 1st AC and Executive Class of travel.
In a letter to Finance Minister Arun Jaitley, Railway Minister Suresh Prabhu said that the number of passengers travelling by train has seen a dip. “Since the number of people travelling by train is declining, Railways could lose more passengers if fares are increased further,” Prabhu pointed.
Responding to a suggestion by the FM to levy a safety cess, Prabhu asked for assistance of Rs 1.19 lakh crore over five years to execute on safety parameters.
The total earnings from passengers and goods have declined by over 11 per cent in this quarter in comparison to the same period last fiscal.
Passenger bookings dipped to 683.17 million as against the target of 686.61 million. Even income from freight reported a sharp decline by 9.7 per cent. In revenue parameters, this is a massive hit to the ailing health of the national transporter.
The Railways earlier expected to earn Rs 500 crore in the current financial year from the flexi fare structure in 42 Rajdhanis, 46 Shatabdis and 54 Durontos.  There were 5,871 vacant berths in Rajdhani, Shatabdis and Duronto trains during September 9-October 31 this year, even though they saw an increase in revenue due to the festive season before the passenger earnings slowed again. 
Under the flexi fare scheme, the fare increases by 10 per cent with every 10 per cent of berths sold subject to maximum prescribed limit 1.5 times in Sleeper, 2AC, AC Chair Car and in 3AC class.
A senior Railway official attributed the losses due to the ongoing price war triggered by airline operators who are offering cheaper tickets than Railways on several routes. “Air tickets for a family of four sometimes are cheaper than in some of our premium and Suvidha trains,” he said.
Admitting to the decline in revenue collection, another senior Railway Ministry official said there is a general decline in demand and since a great cause of concern but the Ministry has been taking steps to ensure good health of Railways’ revenue. The Railways had also announced many ambitious projects, including massive expansion and modernisation of rail networks like Bullet trains, semi and high-speed trains and new variety of trains like Humsafar, Tejas, Gatiman, Deendayalu with higher tariffs.
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