Indian Railways acts to boost revenue without fare hike: Here’s the masterplan

Indian Railways is working on a plan to increase its revenue in passenger segment. Interestingly, in the process, it is not going to increase passenger fares. Sources close to the development informed Zee Business's Sameer Dixit that the railways has decided to shift its focus on premium trains and will concentrate only on four categories of trains, namely Tejas express, Humsafar express, UDAY (Utkrisht DoubleDecker Air-conditioned Yatri), and Antyodaya Express.

Antyodaya, Humsafar, UDAY and Tejas are the new age trains of Indian Railways and are lashed with new passenger amenities. However, the fares for all these premium trains are more than the existing trains.

This step will help railways achieve few targets like improving its image by increasing the number of premium trains like Hamsafar and Tejas and receive accolades from the passengers and to fill its treasury through increased fares of these trains.

Data to understand the step of Railway Ministry

There were 24 Hamsafar (highest among all), Tejas, Antyodaya and UDAY trains in the fiscal year 2017-18 but in 2018-19, the government has planned to increase their number to 40. In fact, annually, the number of these trains will be doubled in coming years.

Besides, railways have taken a decision to augment air-conditioned (AC) coaches gradually in new trains of which maximum trains will be 3AC coaches. This decision clearly signals towards Hamsafar trains, which has shown positive results since it was launched.

Actually, third AC coaches are always profit-making initiative and don't allow Railways to lose money. In all the pricing policies, 3AC is the only one that makes a profit. and a complete 3AC coaches train enables railways to earn around Rs 10-12 lakh.

When it comes to fares, then the Hamsafar train fare continues to be 15 per cent more than the rent of existing 3AC trains and it continues to increase after every 10 seats are booked. But this increase has been capped at 1.5 times. Similarly, premium chair cars train Tejas fare is 20 per cent higher than the fare of Shatabdi trains.

It is clear that a slight increase in passenger booking by increasing the number of these premier trains will help Railways to grow its treasury in a good way. To increase its earnings through Hamsafar and Tejas, it has revised its target of coach production in its factories. It has increased the annual production target of LHB coaches from existing 4,000 coaches to 6,000 coaches. In this revised target, 1,000 coaches will be 3AC coaches.

Railway is planning to increase its revenue by adopting a backdoor entry because it is in no mood to increase the passenger fares, right now.