Suresh Prabhu’s strong defence of surge pricing in Rajdhani, Duronto and Shatabdi; 5 facts Indian Railways has put out

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Updated: September 9, 2016 11:02:23 AM

Surge pricing: Suresh Prabhu-led Indian Railways has sent out a series of tweets, clarifying that the move will not affect the common man.

Rail fare hike,Train fare hike, Rajdhani fare hike, duronto fare hike, Shatabdi fare hike, Surge pricing railwaysIndian Railways has said: The methodology of price rise in our case is transparent and completely predictable.

In a strong defence of its flexi-pricing system for Rajdhani, Duronto and Shatabdi, Suresh Prabhu-led Indian Railways has sent out a series of tweets, clarifying that the move will not affect the common man. “142 trains out of about 12500 total trains (1.1% only) and 3200 Mall Express trains (4.4% only) run by Indian Railways will be chosen for this experiment. This will affect less than 0.15 million high end passengers out of total 23 million passengers carried by Indian Railways daily. Lower-end passengers are not affected by this experiment,” Indian Railways has said.

This is not the first experiment with flexi fares, says Railways. The first flexi-fare (at that time called the Dynamic Fare) train was introduced on 22.12.2013 between Delhi and Mumbai Central with fare up to 3.9 times the base fare.

Not like tax aggregators: Seeking to dispel myths surrounding the system and its comparison with surge pricing that taxi aggregators follow, Railways has said, “The methodology of price rise in our case is transparent and completely predictable. Also the price rise is limited by an upper ceiling of 50% of existing fare unlike the surge pricing of cab aggregators.”

Internationally followed: Railways has also said that the system is followed internationally. “Railways like Russian Railways, European Railways, UK, French, American Railways, Japanese Railways etc all have been following dynamic pricing since long,” the transporter has said.

Loss: Talking about the loss that it is occurring, Railways has said, “While the cost per passenger kilometre on Indian Railways was 73 paise, Indian Railways recovered only 37 paise. As a result of subsidisation of passenger services, Indian Railways bore a loss of Rs 33,490 on coaching services.

Not-overcharging: Indian Railways only recovers 57% of its travel costs on an average. Passenger business is running at a loss of Rs 33,000 crore. At the same time, Indian Railways is spending heavily on new infrastructure creation, upgrading passenger amenities. Additional revenue will be reinvested in capacity building instead of only covering losses, it has said.

No double-trouble: The introduction of flexi fare is accompanied with dropping of Talkal charges. No additional charges as “Tatkal charges” will be levied.

Reports suggest that the surge pricing will fetch Indian Railways an additional Rs 500 crore from the passenger segment in FY17. According to the new “flexi fare system”, the base fare will rise 10% with every 10% of berths, sold subject to a ceiling.

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