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Good news for Railway passengers: Flexi-fares to be capped at 1.4 times

In a relief to passengers, the Indian Railways has revised the flexi-fare system — the peak fare will now be capped at 1.4 times the base fare instead of 1.5 times earlier, and the surge pricing has been completely scrapped for trains with less that 50% average monthly occupancy in the last financial year. “Win-win […]

The Comptroller and Auditor General of India earlier this year, in a report tabled in Parliament, had slammed the scheme stating that it had resulted in a decrease in occupancy in all classes except the sleeper class in the Duronto trains.
The Comptroller and Auditor General of India earlier this year, in a report tabled in Parliament, had slammed the scheme stating that it had resulted in a decrease in occupancy in all classes except the sleeper class in the Duronto trains.

In a relief to passengers, the Indian Railways has revised the flexi-fare system — the peak fare will now be capped at 1.4 times the base fare instead of 1.5 times earlier, and the surge pricing has been completely scrapped for trains with less that 50% average monthly occupancy in the last financial year.
“Win-win situation: The reduction of Flexi Fares is going to benefit both the passengers that can now avail tickets at cheaper rates, as well the Railways that will see a surge in demand and occupancy,” railway minister Piyush Goyal tweeted on Wednesday. While the surge pricing system will now not be applicable on 15 premium trains completely and in 32 such trains during lean periods (February, March and August), the capping of the peak fare will be applicable on 101 trains.

The changes shall be implemented from the advanced reservation period — four months after making necessary changes in the passenger reservation system — on an experimental basis for six months, to be further extended after assessing its outcome, said a railway ministry release.
The flexi-fare scheme was introduced on premium trains such as the Rajdhani, Duronto and Shatabdi — 168 in total — in September 2016, wherein the base fare goes up by 10% with every 10% of the seats being booked. The system was not applicable on air-conditioned (AC) first-class and executive chair-car categories. The peak fare was already capped at 1.4 times the base fare in the AC three-tier category.
The Comptroller and Auditor General of India earlier this year, in a report tabled in Parliament, had slammed the scheme stating that it had resulted in a decrease in occupancy in all classes except the sleeper class in the Duronto trains.

Even in the AC-3 class category, which is the only profitable class for the transporter, the occupancy dropped significantly since the scheme’s introduction. “Vacant berths increased from 0.66% in pre-flexi period to 4.46% in post-flexi period,” the CAG had said. “In terms of absolute numbers, the Premier trains carried 2,40,79,899 passengers during post-flexi period as compared to 2,47,36,469 passengers during pre-flexi period. There was de-growth of 2.65% despite the availability of higher number of births/seats, which resulted in sub-optimal utilisation of national assets,” said the report. It had added that “there is a need for review and fine-tuning in the scope of the scheme so that not only more revenue is earned but number of passengers also increase”.

The railways had constituted a committee within the Railway Board to examine the flexi-fare system, which submitted its report suggesting various options and a final view was taken by Goyal.

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