Flexi Fare Scheme of Indian Railway

"Flexi-Fare Scheme of Indian Railway  & CAG Report on this scheme."

Background
  • To Sustain Indian Railway - There is need to increase revenue in Indian Railway so that expenditure can met.
  • But we know operating cost is 98.5% (i.e. 98.5 Paisa Spend to Earn 100 Paisa - as per 2017-2018 data). Even in 2000-2001 Operating Cost is 98.3%. Which is not a large gap.
  • But as per govt, Due to 7th Pay commission Operating costs increase.  So govt targeted to reduce the operating costs to 92.8% in 2018-2019.

 Expenditure:-

 Thousands of Crore spent in Salary.
Thousands of Crore spent in Pension.
Thousands of Crore spent in Subsidiary.

Aim

So, To increase revenue there are many ways. out of which one is "Flexi Fare System". i.e. As per Demand - Price increases. 
So, Ministry of Railways have decided to introduce the flexi fare system for Rajdhani/Duronto and Shatabdi train

In this Fare System:

First 10% Seats - Price is Base Price.
Next 10% Seats - Price Increases by 10%.
Next 10% Seats - Price Increases by 10%. and so on...

But There is a maximum limit i.e. Price is not more than 1.5 Times (for Sleeper Class, Chair Class) and 1.4 times (for 3rd AC Class).

Govt Implemented this "Flexi fare System" -  in 2016ust to increase revenue.


 CAG Report:

 But,

CAG Study this "Flexi Fare System" and CAG after study submitted their report in Parliament in 2018.

 As per CAG:
  • This scheme force the passengers to opt for 'Air-Lines'.
  • Trains like Rajdhani, Dornoto - bear the Loss ( approx 6.5 Lakh passengers travel less) post Flexi Fare System.
  • Though, 550 crore revenue increases as compare to last year.  But point 2 also important and need to study as per CAG.
  • Passengers count Reduced in AC 3rd Class, Chair Class (in Rajdhani, Shatabadi, Duronto)- post Flexi system. - Except Sleeper class in Duronto Trains.
  • Occupancy Dropped Mainly in AC 3rd - which assumes most profitable.
  • In Many routes - AIR FARE is Less as compare to Rail Fare. So People Prefer AIR Lines.
  • The information should also displayed to Passengers at time of booking - in case fare of lower class is higher than of higher class.
     
Railway Board also accepted CAG opinion . 

And, they also formed a committee and committee suggested Earlier that - It should not apply on first 50% Seats and apply on rest 50%. This also forwarded to 'Ministry of Railways'.


 The CAG said that the Indian Railways needs to review the flexi-fare scheme so that not only revenue but also the number of passengers increase. "There is a need for review and fine-tuning in the scope of the scheme so that not only more revenue is earned but a number of passengers also increase, thus, further enhancing revenue.

 To get more info you can go through below Links:-

 https://www.businesstoday.in/current/economy-politics/cag-finds-faults-indian-railways-flexi-fare-scheme-flights/story/280499.html 

 http://pib.nic.in/newsite/PrintRelease.aspx?relid=149606

 Do Comment/Correct if case of any wrong Data, wrong info and share your views on - Flexi Fare System'. Add more info if anyone have in comments, I will verify and update the details in Post- Keep Learning !
Above Information is as per my understanding and all information is as per data available till today.

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