Indian Railways (IR) garnered an additional Rs 625 crore — 1.3% of its annual passenger earnings — thanks to the flexi-fare system launched a year ago in the high-end Rajdhani, Shatabdi and Duronto trains. Passenger traffic in these trains came down 18% to 31.9 million during the year. IR projected 10 % gross traffic receipts (GTR) growth in 2017-18 — passenger revenue 12% and freight 5%. These were revised downwards in the general Budget — GTR is now seen at Rs 1.72 lakh crore, against Rs 1.84 lakh crore originally. Overall passenger revenue in the first five months of this fiscal stood at Rs 20,735 crore, exactly in line to meet the annual target of Rs 50,125 crore. However, officials said neither the flexi-fare system for premium trains introduced in September 2016 nor the differential pricing for other trains that immediately followed would suffice to correct the huge cross-subsidy for passenger segment. This segment is subsidised to the tune of Rs 30,000 crore per year at the cost of higher fares in the freight segment. “The flexi pricing did bring down the passenger volumes. However, the net gain from the policy has still been around Rs 510 crore,” said a ministry of railways official. The official said the additional earnings from flexi pricing could have been higher had train services not got affected during the July-August period due to heavy rains in many parts of the country including Gujarat, Maharashtra and the northeast which led to cancellation of many trains.
“For up to 15 days, Rajdhanis did not operate. Had that not been the case, earnings would have been higher,” said the official. There have been reports that the railways may be looking to tinker the flexi pricing mechanism, after Railway Board chairman Aswani Lohani hinted at lower prices during lean seasons. But sources said that given that the passenger segment is already under the huge burden of social obligation cost, reducing prices may not be practical. “However, we are looking into the mechanism and we are discussing various options. An improved version of flexi-fares may be announced soon,” added the official.
Earnings from the passenger segment stood at around Rs 47,500 crore for financial year 2016-17, a tad below the revised target of Rs 48,000 crore, but better than the Rs 45,376 crore achieved a year earlier. This was despite the transporter carrying around 8,219 million passengers in 2016-17 compared with a target of 8,182 million (revised estimate) and 8,151 million achieved in 2015-16.