Dec 8, 2016

Suresh Prabhu proposes: Give up your Railway ticket subsidy

While the passenger business is approximately a Rs 50,000-crore pie, Railways is staring at a shortfall of at least Rs 20,000 crore by the end of this fiscal.
Railway Minister Suresh Prabhu. (File Photo)

Asking people to give up their fare subsidy voluntarily, special weekend fares for some trains, last-minute discounts on vacant berths — these are some of the ideas proposed by Railways Minister Suresh Prabhu to boost the earnings of the Indian Railways.
Prabhu sent the suggestions in a note to the Railway Board on November 24. Sources said relevant policy interventions would be firmed up in a few days.

However, officials said, asking people to give up their fare subsidy may prove tricky.

In the case of the Petroleum Ministry, the bank accounts of customers were linked to their LPG connections. So it was easier to ask people to give up their cooking gas subsidy.

Since a similar model may not work for the Railways, a new structure is being worked out, starting with a pilot project for e-tickets only.

For some time now, the Railways has been stating on its tickets that only 57 per cent of the cost of the journey is recovered through the fare. This gives the impression that 43 per cent is the quantum of subsidy on each ticket, although the current accounting system in the department does not give the exact cost.

The department is now in the process of overhauling its accounting system. For the pilot project, ideas like providing some “slabs” of subsidy surrender are doing the rounds. This means that a passenger may get to choose how much of the subsidy he is willing to give up.

Prabhu has also stressed on special fares for sectors in popular Rajdhani/ Shatabdi routes which do not see much patronage. Sources close to Prabhu said this move could be a way to compete with other commercial transport options in the sub-200-km distance category.

Currently, a tentative last-minute discount of 10 per cent on vacant berths is being discussed. Prabhu has said that rationalisation of the last “flexi-fare” to get passengers for vacant berths would be a good idea. However, the issue of informing the public about the last-minute vacancies is yet to be resolved.

Senior officials said the ideas would be implemented in various forms because the Railway Board had found them useful and doable.

Meanwhile, Railways is in the process of linking its various passenger concessions with Aadhaar, starting with concessions for senior citizens.

While the passenger business is approximately a Rs 50,000-crore pie, Railways is staring at a shortfall of at least Rs 20,000 crore by the end of this fiscal.
Source - Indian Express