Railways proposes demand-based fares with 25% surge cap and discounts of up to 25% on low-demand routes

Indian Railways is reportedly considering changes to ticket pricing and the system behind it. The traditional fare structure and the flexi-fare system, in place for several decades, are said to be set for replacement.

A new proposal for a dynamic surge cap and a flexible fare policy is under consideration. Under it, train ticket prices would be set automatically on the basis of demand and supply. When the final decision will be taken and exactly what provisions it will contain is not yet clear.

According to the proposal, during peak seasons and festivals up to 25 per cent more than the base fare could be charged, and no higher. The surge cap would remain in force, so passengers would not be charged arbitrary prices. On routes where demand is low, a provision would be made for a direct discount of 10 to 25 per cent for passengers. It is claimed that this two-way fare system could make tickets cheaper for budget travellers.

It is also being said that higher demand for seats on trains with fewer passengers could benefit the railways' revenue.

Discounts possible at the last minute

If more than 30 per cent of a train's seats remain vacant 24 to 48 hours before the chart is prepared, the system could automatically offer a discount of 10 to 15 per cent on the base fare. There is also a proposal to offer a discount of up to 25 per cent on the fare in the off-season, or on routes where passenger numbers are consistently low, to fill vacant seats at the last moment. Passenger traffic data and revenue models of different railway zones are being studied. The railways claim that a discount of up to 25 per cent in the off-season will attract the middle class, students and those who travel on a low budget.

Which trains could be covered

Rajdhani, Shatabdi, Duronto, Vande Bharat, Tejas, Humsafar, Garib Rath, Jan Shatabdi and all mail and express trains could come under its purview. However, it will not apply to local trains, MEMU, DEMU and season tickets.

Why fares are being raised

The railways say it costs Rs 100 to carry a passenger, while only Rs 55 is recovered from the ticket. The remaining 45 per cent is borne by the government as subsidy, amounting to Rs 60,000 crore a year. This modest increase is being made to earn an additional Rs 600 to 700 crore a year, because of rising fuel, maintenance and salary costs.