Railways to get income boost via premium tatkal pricing

The move may bring in an additional income of Rs 300 cr, if the experiment proves to be a success

With losses from passenger operations crossing Rs 26,000 crore in FY14, the Indian Railways is trying to generate some extra money by selling 50 per cent of the tatkal tickets under dynamic pricing model on select routes. The move would bring in an additional income of Rs 300 crore, if the experiment proves to be a success, senior Railway officials said.

Under this model, ticket prices vary according to demand. The Railways already run premium trains at 30 routes, whose base fare starts from the tatkal fare and at the peak of the demand, it competes with the air fares.

About 20 popular routes across the country are identified where half of the tatkal tickets would be sold through premium pricing. The routes include Delhi-Mumbai, Delhi-Patna, and Chennai Central-Ahmedabad.

The zonal divisions of the Railways have been asked to come up with a plan for phase-wise rolling out of the scheme. The move is expected to be boost the revenue generation of cash-strapped Railways by up to 40 per cent on these routes. About 15 per cent of the reserved category tickets are tatkal tickets, which make up for five per cent of income from the passenger operations.

In FY14, the Railways yielded Rs 1,298 crore through tatkal tickets. About 170,000 seats, of the 1.1 million available, are up for booking under the tatkal scheme.

In December last year, the Railways had conducted a pilot between Delhi and Mumbai for premium trains during the Christmas-New Year rush. It is estimated that the Railways earns Rs 19 lakh from a one-way journey on the Delhi-Mumbai Rajdhani. The earnings were spiked by 43 per cent on a single journey, according to senior Railway Board officials.

In the last financial year, the Railways earned Rs 37,500 crore from passenger operations, while for the first time in many decades, the volume fell one per cent on a year-over-year basis. For FY15, the Railways has set a target of earning at Rs 44,645 crore from passenger operations and it expects a five per cent spike in volume.

In June, the Railways had announced an increase of 14.2 per cent in passenger fares and 6.5 per cent in freight rates. However, the hike in sub-urban passenger fares was withdrawn amidst political pressure, which cost the Railways Rs 670 crore.