1. Data drive: The unfair Indian Railways fares

Data drive: The unfair Indian Railways fares

The Indian Railways has been losing money regularly on passenger traffic. According to a study on the impact of Social Service Obligations by the Indian Railways conducted by NITI Aayog member Bibek Debroy and OSD Kishore Desai, the railways incurred losses on all classes but AC3-tier fares

By: | New Delhi | Updated: September 17, 2016 7:04 AM
The lower fares charged by the railways has meant that people prefer to travel by train rather than buses to many close locations.(Reuters)

The lower fares charged by the railways has meant that people prefer to travel by train rather than buses to many close locations.(Reuters)

The Indian Railways has been losing money regularly on passenger traffic. According to a study on the impact of Social Service Obligations by the Indian Railways conducted by NITI Aayog member Bibek Debroy and OSD Kishore Desai, the railways incurred losses on all classes but AC3-tier fares. In 2014-15 it was Rs 33,000 crore on earnings of Rs 49,000 crore (67%). The second and sleeper classes accounted for more than 75% of the entire passenger business losses on an average over the four-year period—2011-12 to 2014-15.

rail-1

rail-2

rail-3

The lower fares charged by the railways has meant that people prefer to travel by train rather than buses to many close locations. It is only on AC trains that rates are higher than buses. The study has also concluded that the under-recovery in 2nd class and ordinary classes is almost 100% while in sleeper classes, it is 60%. Changing that is tough. So the Indian Railways has to find non-fare means also to raise revenues in the immediate future.

  1. Ramesh Konda
    Sep 17, 2016 at 9:26 am
    subsidising penger fares, inspite of growth of economy, incomes, lifestyles and other indicators is fascism of indian kind
    Reply
    1. J
      J Madhav
      Sep 17, 2016 at 12:13 pm
      The Public must also understand that the Railways is the heart and the lifeline of the country and should be run efficiently and accommodate all sections of society. Therefore railways are attempting to make improvements in the comfort of all the cles.But it should keep in mind the costs. I feel that in areas where the Railways are bleeding, they should increase prices to cover costs.
      Reply
      1. Raman Govindan
        Sep 17, 2016 at 5:39 am
        railways, state transport undertakings electricity boards, agricultural cooperative banks, water supply and drainage boards lose money continuously every yer. their managements do not charge the cost plus depreciation but give the services at a very subsidized rate. the state governments ,if they were to run efficiently and may get profit, but they do not want to give income tax to the center. they want to compete with other state governments for grants, compensation for losses, special treatment for the state on account of under development, poverty illiteracy,, poor roads, infrastructure, hospitals etc. they do not want to say with pride that they are toppers but put self respect to winds and proclaim their poverty!
        Reply
        1. J
          JP SINGHI
          Sep 18, 2016 at 9:10 am
          RAILWAY IS PART OF GOVT.S SOCIAL SERVICE THAT IT HAS TO UNDERTAKE. THEY HAVE BEAR THE LOSS. WE BEAR INCOME TAX LOSS FOR SOCIAL SERVICE TO OTHERS.DONT THINK OF PROFITS IN CASE OF SOCIAL SERVICES.
          Reply

          Go to Top