Suresh Prabhu's rail ministry is learning from the airlines industry, but all the wrong things

Railways minister Suresh Prabhu is picking up all the vices of the airlines industry, but none of its virtues.

Make no mistake about it, Prabhu's attempt to introduce 'surge pricing' on some premium trains on the pretext of emulating the aviation sector is plain loot and misuse. The railways introduced flexi-fares for 81 trains, including the Shatabdi, Duronto and Rajdhani, from Friday to sponge an additional Rs 500 crore from passengers. According to the new system, fares will go up by an additional 10 percent, reaching a peak of 50 percent, with every 10 percent increase in booking.

So, if you are trying to book a seat on a Rajdhani train after 50 percent of its tickets have been booked, the railways will charge you an additional 50 percent premium. In other words, only 10 percent tickets will be available at normal fare. And, since the railways are a black hole, nobody knows when the prices could be inflated artificially.

File image of Suresh Prabhu. AFP

File image of Suresh Prabhu. AFP

This is being done ostensibly to match the standard fare rules in the airlines industry. But, here is the catch: Unlike the aviation industry, the Indian Railways doesn't offer discounted tickets. The base price of the ticket is always fixed. For instance, passengers looking to fly from Jaipur to Pune can buy an air ticket during promotional sales for around Rs 2,000, around 30 percent less than the base fare of around Rs 3,000. But, a 3-tier AC train ticket for the 25-hour journey will never be sold for less than the current fare of Rs 1,930. (Whether or not passengers will pay a premium for a 24-hour journey when air travel costs less is a debate we are not even getting into here)

So, unlike the aviation industry, the railways is willing to overcharge during peak traffic, but is averse to give discounts when business is low.

Also, unlike the airlines industry, train travel is a monopoly of the railways. A passenger looking for an air ticket has the advantage of benefitting from competitive pricing and discount wars within the sector. But, if you want to travel on a train, there is just one option — take it or leave it. As The Economic Times argues, to squeeze the monopoly-induced artificial shortage to jack up fares is unfair. Also, railway finances are in bad shape due the practice of upper-class passenger fares, apart from freight, subsidising lower-class fares. It will turn around only when the government resolutely ends this practice. Ratcheting up upper-class fares to garner extra revenue is plain wrong.

If the Indian Railways is in a mess, it is largely its own fault. In a country of 1.3 billion, in a monopoly market, where finding a confirmed train ticket even months in advance is nothing less than a miracle, if it is incurring losses, the fault is entirely of the railways. Asking the passengers to pay more is plain wrong.

Today, many airlines are offering tickets at far lower prices than an equivalent journey in a 3-tier AC compartment of Indian trains. If they can survive, expand and show profits, making travel cheaper in the process, why can't the railways come up with a similar strategy? Since he became the minister, Prabhu has already tried several tricks to covertly extract more money from passengers, maintaining the facade of keeping fares the same.

Cancelling a ticket now costs much more than two years ago. The railways now charges Rs 180-240 for every confirmed ticket (AC and above) and around Rs 30 even when you are wait-listed or given a reservation against cancellation. Unlike the practice of filing for TDR a few years ago if you missed your train or could not travel, no money is refunded for last-minute cancellations. Now, you don't get anything for cancelling tickets after charting is done either.

Another of Prabhu's money-minting plans has been to charge kids full fares for a berth. This is a deviation from the age-old practice of giving children between five and 12 years of age a discounted ticket. While fares, charges, VAT, service tax etc have been going up, there has not been an iota of difference in either availability or services. Most trains get booked months and weeks ahead of travel, and their compartments and toilets are in pitiable condition. In addition, there have been no investments to ensure safety of passengers: Anybody can walk in unchecked; the infrastructure needs urgent attention and security measures that are de rigueur in the aviation sector are a pipedream for the railways.

Due to the rampant abuse of monopoly, prohibitive fares and mismanagement, the Indian Railways is actually hurtling towards a disaster. It has reached a stage where flying sometimes becomes a cheaper option than travelling on a train. (Compare AC 2-tier rates between major cities with standard air fare and discounted prices with AC 3-tier).
With harebrained schemes like jacking up the fares further, railways is hastening its tryst with extinction.

The only problem: It is looting passengers on the way down.

Updated Date: Sep 09, 2016 15:04 PM

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