Indian Railways’ flexi-fare scheme for its premium Rajdhani, Shatabdi and Duronto Express trains has been criticised by the Comptroller and Auditor General (CAG) of India. In its latest report, the CAG has observed a worrying trend for Indian Railways – passengers are choosing air travel over trains on routes where fares in Rajdhanis and Durontos are higher due to the flexi-fare scheme! Not only that, on several routes passengers are opting for the longer duration but cheaper Mail/Express trains instead of paying higher train fares for Rajdhanis, Durontos and Shatabdis! CAG has also pointed to the fact that in the past four years there is a declining trend in passengers carried by Indian Railways.
While criticising the less than judicious introduction of the flexi-fare scheme, CAG admits that the passenger earnings have increased. There has been an increase of Rs 552 crore in passenger earnings after flexi-fare was introduced. However, Indian Railways carried 6.75 lakh less passengers in its premier trains post introduction of the scheme, despite a 3% increase in berth potential.
Introduced in September 2016, the flexi-fare scheme charges passengers higher fare as the berths fill up. The fare increases by 10% as every 10% of the berths/seats get sold. This is with a cap of 140% for AC-3 tier class and 150% for all classes except AC First and Executive Chair Car. For this report, CAG has examined data between 9 September 2015 and 31 July 2016, that is the pre-flexi scheme period and between 9 September 2016 to 31 July 2017, that is the post-flexi scheme period. Financial Express Online takes a look at some data points that CAG has showcased to point to the problems of the flexi-fare scheme:
1. According to the CAG before introducing the flexi-fare system, Indian Railways experimented with dynamic/enhanced fare. For example, under Tatkal scheme 30% of the seats/berths were allotted at enhanced fare of 30% more than the normal fare. In such a case berths remained vacant by as much as 5-23% in AC 2, AC 3 and CC classes of all the Rajdhani, Duronto and Shatabdi trains, observed CAG. Only in the sleeper class of Duronto did the Tatkal tickets get booked. Hence, CAG is of the view that when Indian Railways was unable to fully utilise 30% of seats/berths under Tatkal scheme with enhanced fare, the decision to allot 90% seats under flexi-fare with higher fare up to 40-50% was “not judicious”.
2. CAG states that the vacant seats which were 10.11% of the total potential before flexi-fare introduction increased to 15.10%. The total number of passengers carried during the pre-and-post flexi-fare scheme period decreased from 2.47 crore to 2.40 crore, which is a de-growth of 2.65%. This happened despite availability of higher number of berths/seats!
3. No case of flexi-fare in AC 3-tier: CAG cites an Indian Railways’ White Paper of 2015 on AC 3-tier class. The White paper states that Ac 3-tier is the only class that breaks even at 75% occupancy. But, the occupancy in AC 3 tier has dropped significantly after introduction of flexi-fare, states CAG. The vacant berths increased from 0.66% to 4.46%. Hence, CAG believes that the introduction of flexi-fare in AC 3-tier class, which was already a profit making class, was not fair.
4. Impact of flexi-fare on occupancy in other trains: “The occupancy of AC 2 and AC 3 tier class of Mail/Express trains on the same routes as Rajdhani trains was significantly higher than the occupancy of corresponding classes of Rajdhani trains and was more than 100 per cent in after the introduction of the flexi-fare system,” says CAG. This points to the fact that passengers preferred Mail/Express trains over the Rajdhani/Duronto/ Shatabdi trains despite a higher travel time for the former.
5. Air travel lucrative! CAG compared the AC-2 tier fares of Rajdhani and Duronto trains in 13 sectors to economy air fares and in several found air fares to be cheaper. According to the CAG, this indicated that when compared to the cost and time taken for travel by AC 2 and AC 3-tier, air travel by economy class was cheaper and hence the preferred mode of travel. On one hand the number of train passengers of AC 2 and AC 3-tier class of premier trains shows a decreasing trend, on the other hand air passengers have shown increasing trend. According to CAG, this means that the decrease in occupancy in premier trains led to passengers shifting to air for travel in these sectors.
6. CAG also slams Indian Railways for not improving the punctuality rate of the Shatabdi, Rajdhani and Shatabdi Express trains, despite introducing flexi-fare. Even after introduction of flexi-fare, punctuality of trains has not been maintained, it notes adding that in 19 Rajdhanis, out of 311 services around 78% were delayed! The figures for Durontos and Shatabdis are equally dismal.
7. No improvement in quality: CAG carried out a survey for passenger feedback and discovered that they expect better quality services commensurate with the enhanced fare. However, at present many of them feel that they have not derived value for money and time spent in the Premier trains and that they would prefer to switch over to other modes of transport, CAG notes.