A scheme should raise earnings and not
hurt passengers’ pockets
Mains Paper 4: Governance
Prelims level: Flexi-pricing scheme
Mains level: Issues relating to development and management of Social Sector
- Indian Railways rolled back, albeit partially, its much touted
“flexi-pricing scheme” earlier this month.
- This should bring cheer to a vast multitude of rail travellers who
were finding the flexi-fares a little too steep.
- However, the relief is expected to start trickling only after 120
days, a period for which rail tickets can be booked in advance. The
reason for introducing “flexi-pricing”
- Indian Railways’ passenger fare structure is one of the most
unscientific entity, subjected to intense political whims and fancies.
- The railways have been offering one of the lowest passenger fares
in the world, and have been subsidizing these losses from high freight
- As the rail coefficient in the overall freight basket nosedived
below 30% by 2015-16, the finances of the railways started showing signs of
- Subsequently in September 2016 the railways introduced
“flexi-pricing” to shore up its passenger revenue.
- The civil aviation sector, which has a number of private players,
already had a mechanism of dynamic pricing.
- The airfare on various routes goes up and down, depending upon
demand and supply.
- The “flexi-pricing” on the railways, on the other hand, only
- In a true demand-and-supply curve the equilibrium is achieved
under market forces, whereas the railways’ flexi-pricing aims at a
predetermined, bureaucratically derived, equilibrium point.
- This experiment, implemented on 142 trains out of around 2,000
mail and express trains running on the system daily has increased the
earnings by only about ₹50 crore a month.
- It’s an increase of a paltry 1.5% over the average monthly
earnings of ₹3,600 crore from the non-suburban passenger segment.
Why it has not delivered the anticipated benefits?
- There is a reasonable doubt that a large proportion of these
missing passengers actually shifted to air travel, since the flexi rail
fares sometimes climb even higher than the air fares on certain sectors.
- For journeys up to 500km, Volvo and other AC buses are now in
competition with rail for the same reason. And this is not good for the
country on holistic terms.
- On both environmental and social sustainability parameters, rail
transport wins hands down when compared with other modes of transport.
- The government should take suitable steps to improve the share of
rail transport in both freight and passenger segments.
- With elections breathing down the neck, no hard decisions can be
expected from the railway administration.
- A well thought out scheme for raising passenger earnings without
hurting the pockets of an average passenger and also maintaining a sense of
fair play is the call of the day.
Q1. SFOORTI APP, recently launched by Ministry of Railways, is
(a) tracking the health and maintenance of railway tracks.
(b) fast tracking the construction of new railway stations.
(c) insurance facilities provided to the railway employees.
(d) tracking the freight movement.
Q1. Government should take suitable steps to improve the share of rail
transport in both freight and passenger segments. Critically analyse the