Railways forms Group to increase revenue

Indian Railways has been able to bring down the shortfall in the passenger revenue over the past three months from Rs.4,000 crore to Rs.3,000 crore by increased checking for ticketless travel and running a record number of special trains during the festive season, according to an official

New Delhi: Indian Railways is looking at ways to bridge the expected shortfall in earnings after missing traffic targets in the passenger segment.  It has formed an internal group headed by D.P. Pande, Member Traffic, Railway Board, to look into ways of increasing revenue from the passenger segment.

Passenger revenue has grown at 17% starting March till October compared with the year-ago period, as against the budget estimate of 33% growth. “There is a shortfall of around Rs.3,000 crore up till now in the passenger revenue,” said Pande.

The group is considering options that include running special trains on a regular basis to capture waitlisted traffic and dynamic pricing for confirmed tickets

“We now intend to run regular special trains or adding extra coaches for meeting any waitlist demand,” said Pande. “We are saying the moment you see a waitlist, see if we can capture it immediately.”

“If there is an option available of a dynamic pricing system on the passenger segment because on the freight side we have one, and if it is acceptable to people, the group will look into that option too,” he said. ‘We can introduce extra train services with value added services and charge more, but if only we can execute it.”

Indian Railways has been able to bring down the shortfall in the passenger revenue over the past three months from Rs.4,000 crore to Rs.3,000 crore by increased checking for ticket-less travel and running a record number of special trains during the festive season, Pande said.

Indian railways had set a target of Rs.43,000 crore of revenue from the passenger segment in its budget.
The overall total gross traffic receipts of railways might fall Rs.2,000 crore short of the budget estimate of around Rs.1.43 trillion on account of less than projected passenger earnings, Arunendra Kumar, chairman, railway board, said in a 16 October interview. “On the revenue side of passenger earnings, we had projected a very ambitious increase of 33%. Presently, we have seen a 17-18% increase in passenger earnings over last year in the first six months. There has been a drop in 0-50km segment i.e., in the short distance.”

While the group is focusing on options to increase passenger earnings, railways is also keen to increase freight revenue, Pande said.

“Given that budget estimates were ambitious and they won’t be getting much support from the government as it is in a tight fiscal situation, the railways needs to both increase its revenue and reduce costs. This, in fact, should be made a regular practice,” said Abhaya Agarwal, a partner at EY Llp who oversees the infrastructure practice at the consultancy earlier known as Ernst and Young. “On the freight front, however, the railways should not be driven just by the long-lead approach. The push should be on better utilization of capacity and on customers who can provide more business with better margins.”
Lead is the average distance travelled.

Print Friendly