The revenue generation, which is a critical function of the national transporter is based on a number of factors including passenger fare and freight rates, domestic and international macroeconomic scenario, growth in core sectors of economy and availabilities as well as pricing of alternative modes of transportation.
Have you ever wondered how the revenue is generated in Indian Railways? The revenue generation, which is a critical function of the national transporter is based on a number of factors including passenger fare and freight rates, domestic and international macroeconomic scenario, growth in core sectors of economy and availabilities as well as pricing of alternative modes of transportation. In a reply to a question in Rajya Sabha, Rajen Gohain, Minister of State of Railways, stated that in order to rationalize the tariff so as to increase revenue, a number of steps have been taken recently, including Liberalised Automatic Freight Rebate scheme for traffic loaded in empty flow direction, discount on loading of bagged consignment in open & flat wagon, withdrawal of port congestion charge, rebate in freight under Long Term Tariff Contracts (LTTC) with key freight customers, rationalization of coal & coke tariff etc.
Additionally, for enhancing ease of doing business, a number of steps have been taken such as Registration of Demand for wagons electronically, Customer friendly rationalization of weighment policy, Multiple RRs for single container train, Electronic Transmission of Railway Receipt (eT-RR) etc.
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To increase earnings from passenger and non-fare services including parcel, Indian Railways says it has taken several steps such as the introduction of flexi-fare system in the higher category of trains – Shatabdi, Rajdhani and Duronto Express trains. Also, arrangements have been made for running of special train services during peak time, higher fares have been fixed for running of special train services. Many trains services including Suvidha trains, Humsafar Express, Antyodaya Express, Tejas Express and Mahamana Express have also been introduced.
Indian Railways also introduced flexi fare from 9th September 2016. According to the Railway Ministry, during 2016-17 (Sept to Mar), 2017-18 and 2018-19 (April to June), the national transporter earned nearly Rs 371 crore, Rs 860 crore and Rs 262 crore respectively, as additional earnings from trains having flexi fare. However, the response has been mixed from various quarters to the introduction of flexi fare scheme. Interestingly, even as Indian Railways cites flexi-fare as a step towards better revenue generation, in a recent report the CAG slammed the national transporter for the very same. According to CAG, while flexi-fare scheme has resulted in greater revenue generation, the number of passengers carried by railways has fallen in these category of trains. CAG has called for a more rationalised and demand-based implementation of flexi-fare.
Many steps have also been taken to improve parcel earnings including having a policy of Parcel Cargo Express Trains (PCET)’, ‘Comprehensive Parcel Leasing Policy (CPLP)’ and Opening of parcel business to container traffic etc.