CAG finds faults in Railways' flexi-fare scheme, hints makes more sense for travellers to take flights

The Comptroller and Auditor General of India (CAG) has asked the Indian Railways to review its flexi-fare system or it will force the passengers to take airlines instead of trains. In its report for year ending March 2017, the CAG has found that the flexi-fare system in premium trains - Rajdhani, Shatabdi and Duronto - led to increase in passenger earnings but the number of travellers during September 9, 2016 to July 31, 2017 came down by over six lakhs when compared to the corresponding period in 2015-2016.

"Wherever dynamic/enhanced fare was introduced, the occupancy was very low. However, this aspect was not taken into consideration while introducing the flexi fare system in all Rajdhani, Duronto and Shatabdi trains irrespective of demand and occupancy. Even in AC 3 class, which was one of the most profitable classes, the occupancy dropped significantly after the introduction of flexi fare and the vacant berths increased from 0.66 per cent in pre-flexi period to 4.46 per cent in post-flexi period," the auditor stated in its report.

According to the report, the premier trains carried 2.40 crore passengers during post-flexi period (September 9, 2016 to July 31, 2017) as compared to 2.47 crore passengers during pre-flexi period (September 9, 2015 to July 31, 2016).

"The occupancy of mail and express trains in the routes of premium trains run was found to be much more than the premium trains during the months test checked (October 2016 and February 2017). As such, passengers preferred to travel by mail and express trains over Rajdhani, Shatabdi and Duronto trains despite a higher travel time," the auditor said.

The CAG compared railway fare based on flexi-fare system with air fare for 13 sectors and found that travelling in aeroplane was cheaper than in train for a large number of routes. When compared to the cost and time taken for travel by premium trains, air fare became a cheaper and preferable mode of travel, the auditor said.

It further said that air fare increases with increase in demand but under the flexi-fare system, there is a fixed increase in fares after every 10 per cent of the tickets booked irrespective of the demand. "By paying a higher price for an air ticket, a passenger is ensured a confirmed seat, but a passenger who purchases a waitlisted train ticket by paying a higher amount does not have an assurance of confirmed ticket. Thus, charging a higher fare without providing confirmed seat/berth would force passengers to explore other available alternatives," the report stated.

The proposal to introduce flexi fare structure in Rajdhani, Duronto and Shatabdi trains was mooted in August 2016 by the Railway Board in order to achieve the additional revenue generation of Rs 5,800 crore in the passenger earnings.

The Rajdhani, Duronto and Shatabdi trains running in most sectors were highly popular with high average occupancy and contributed about 12 per cent of total Passenger Reservation System earnings, the CAG stated questioning the judiciousness of the decision to introduce the system, which can lead up to 50 per cent increase in the base fare.

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," said the report.

(With inputs from PTI)