Flexi fare system can never be the ideal way for the railways to improve upon the revenue gap
It is good that the Indian Railways is considering to give up its flexi fare experiment that was introduced a year ago to mop up an additional Rs 500 crore annually through dynamic pricing. The flexi fare system came as the most roundabout way for the railways to fund its ambitious expansion programme for the coming decade. By effectively increasing the ticket prices by 50 per cent of half the tickets sold on premier express trains, like Rajdhanis and Shatabdis, the railways sought to cover up the revenue gap. There’s no harm with this, given the economic situation of the railways. In fact, the flexi fare structure resulted in giving some commercial gains to the behemoth — it earned an additional revenue of Rs 540 crore in less than a year. But the gains came at a heavy cost. With a dynamic fare system in place, the railways witnessed a sharp loss of occupancy. The most loyal customers of the railways were forced to look for better options as they had another choice in place, that is to fly. Discrepancies with the fare system were so glaring that in some cases, fares of second AC class berths were higher than that of AC one. To top it all, in comparison to air fares on some of the same routes, flying turned out to be cheaper. Resultantly, the experiment backfired. The flexi fare system hit the salaried and the middle class the hardest. Nevertheless, it’s good that the experiment was just temporary and the Government is mulling to bring an end to this monopolistic practice.
However, it is also a fact that the railways is in a critical condition since long due to issues like faulty execution of policies, unrealistically low rail tariff, poor funding and services among others. Undoubtedly, the Indian Railways needs to save every penny to fund its ambitious expansion programme. To this end, a rail fare hike is an option explored by successive Governments. Problem cropped up when the fare hike is done arbitrarily. But there are better ways for the Indian Railways to generate income. It can cut down on the costs of fuel and electricity, streamlining the functioning of railways, hikes in tariff too can happen but at reasonable rates. These are some measures that can help save money. It must also be admitted that the pathetic condition of the railways is not just economical. On the safety and amenity side too it does not fare well. We have had three derailment in the past two weeks itself. There have also been complaints about the poor quality of food being served in pantry cars. Without a robust fare-based revenue system from passengers, it will be difficult for the railways to improve. In any ways, a hike in fares cannot cover up for the current problems faced by Indian Railways. larger participation on the part of the private sector is needed. Come festive season, there may be some good news for the rail passengers.
