In what could ring an alarm bell for Indian Railways, despite several steps for augmentation of revenue through fare restructuring, its total earnings from passengers and goods have declined by over 11 per cent in September 2016 in comparison to the figures in the same period last year.
The Railways recently introduced several innovative fare structures, including flexi fare, and also brought in higher tariffs in newly-introduced train. But passenger bookings dipped to 683.17 million in September as against the target of 686.61 million.
The Railways also rationalised freight rates to attract more loadings, but the income from freight reported a sharp decline by 9.7 per cent. In the revenue parameters, this is a massive loss to the ailing health of national transporter.
Official sources said that similar kind of shortfall was recorded in the month ending July in comparison to the corresponding period in 2015. The biggest cause of concern and fear in the Railway administration is that the shortfall in earnings could cause problems in bringing up the new projects announced and undertaken by Railway Minister Suresh Prabhu.
According to the latest figures, in passenger segment the earnings are way behind the target as Railways earned Rs3,815.43 crore as against the target of Rs4,253.71 crore, a decrease of 10.30 per cent. The total earnings from goods in September were Rs7,719.52 crore as against the target of Rs8,564.27 crore, a decline of 9.86 per cent. A senior railway official said that Railways could only earn Rs12,413.96 crore this September as against the target of Rs13,961.91 crore for the month, which is a decrease of 11.09 per cent.
Railways had introduced flexi-fare system in premier services, including Rajdhani, Shatabdi and Duronto trains, to increase revenue from passengers. The exercise initially showed a good response but then the bookings dipped causing serious concerns to the architects of the rail flexi-fare.
In order to increase revenue model in passenger segment, the national transporter has also done away with providing concessions to children with some riders and also curtailed concessions to NRI senior citizens. The twin measures have failed to bring in any major increase in revenue.
A senior Railway official attributed the losses due to the ongoing price war triggered by airline operators who are offering cheaper air tickets than Railways on several routes. “Air tickets for a family of four sometimes are cheaper than in some of our premium and Suvidha trains.
A primary study also reveals that with good roads and affordable luxury public transport, people are opting road travel to cover shorter distance of up to 500 km like Delhi-Chandigarh, Delhi-Jaipur or Mumbai-Ahemdabad and Chennai-Bangalore. The transportation dynamics involves several things and thus impact is on railways since it support the large number of volume of passengers,” said the official.
Admitting the decline in revenue collection, another senior Railway Ministry official said there is a general decline in demand and since a great cause of concern but the Ministry has been taking steps to ensure good health of railways’ revenue. The Railways has also announced many ambitious projects, including massive expansion and modernisation of rail networks like Bullet trains, semi and high speed trains and new variety of trains like Humsafar, Tejas, Gatiman, Deendayalu with higher tariffs.