Higher flexi-fares for you on Rajdhani, Shatabdi and Duronto: CAG tears into Indian Railways

Indian Railways’ flexi-fare scheme for its premium Rajdhani, Shatabdi and Duronto Express trains has been criticised by the Comptroller and Auditor General (CAG) of India. In its latest report, the CAG has observed a worrying trend for Indian Railways – passengers are choosing air travel over trains on routes where fares in Rajdhanis and Durontos are higher due to the flexi-fare scheme! Not only that, on several routes passengers are opting for the longer duration but cheaper Mail/Express trains instead of paying higher train fares for Rajdhanis, Durontos and Shatabdis! CAG has also pointed to the fact that in the past four years there is a declining trend in passengers carried by Indian Railways.
While criticising the less than judicious introduction of the flexi-fare scheme, CAG admits that the passenger earnings have increased. There has been an increase of Rs 552 crore in passenger earnings after flexi-fare was introduced. However, Indian Railways carried 6.75 lakh less passengers in its premier trains post introduction of the scheme, despite a 3% increase in berth potential.
Introduced in September 2016, the flexi-fare scheme charges passengers higher fare as the berths fill up. The fare increases by 10% as every 10% of the berths/seats get sold. This is with a cap of 140% for AC-3 tier class and 150% for all classes except AC First and Executive Chair Car. For this report, CAG has examined data between 9 September 2015 and 31 July 2016, that is the pre-flexi scheme period and between 9 September 2016 to 31 July 2017, that is the post-flexi scheme period. Financial Express Online takes a look at some data points that CAG has showcased to point to the problems of the flexi-fare scheme:
1. According to the CAG before introducing the flexi-fare system, Indian Railways experimented with dynamic/enhanced fare. For example, under Tatkal scheme 30% of the seats/berths were allotted at enhanced fare of 30% more than the normal fare. In such a case berths remained vacant by as much as 5-23% in AC 2, AC 3 and CC classes of all the Rajdhani, Duronto and Shatabdi trains, observed CAG. Only in the sleeper class of Duronto did the Tatkal tickets get booked. Hence, CAG is of the view that when Indian Railways was unable to fully utilise 30% of seats/berths under Tatkal scheme with enhanced fare, the decision to allot 90% seats under flexi-fare with higher fare up to 40-50% was “not judicious”.
2. CAG states that the vacant seats which were 10.11% of the total potential before flexi-fare introduction increased to 15.10%. The total number of passengers carried during the pre-and-post flexi-fare scheme period decreased from 2.47 crore to 2.40 crore, which is a de-growth of 2.65%. This happened despite availability of higher number of berths/seats! 3. No case of flexi-fare in AC 3-tier: CAG cites an Indian Railways’ White Paper of 2015 on AC 3-tier class. The White paper states that Ac 3-tier is the only class that breaks even at 75% occupancy.