Moneycontrol PRO

Railways aims for better fiscal health; parliament debates cut in concessions

The standing parliamentary committee requested that senior citizen concessions be brought back while scrutinising concessions to railway employees.

August 05, 2022 / 06:57 PM IST
Representative image

Representative image

The financial impact of Indian Railways (IR) social obligations has been debated vigorously in parliament over the past few weeks.

The debate started after the IR decided to continue with a decision, taken during the pandemic months, of reducing the number of categories of passengers allowed tickets at concessional rates.

From 53 such categories earlier, the number has been pruned to just 15. Senior citizens are among those deleted from the list. They were earlier allowed up to 50 percent concession on fares.

The IR, of course, has sound reasons for doing away with much of the discounts: the massive dip in earnings due to Covid, and the continued overall ‘subsidy’ on passenger fares, where passenger tickets are subsidised through freight earnings since fares do not cover the cost of transporting passengers. Hiking passenger fares has always been a highly combustible matter, one which politicians lack the stomach for.

In a written reply on July 22, railway minister Ashwini Vaishnaw said in Rajya Sabha that the “Indian Railways is already bearing more than 50 percent of the cost of travel on average for all passengers, including senior citizens, on account of a lower fare structure for passenger services.



"Apart from this, due to Covid, passenger earnings for the last two years are less in comparison to 2019-2020. These have a long-term impact on the financial health of the railways. Hence, extending the scope of concessions to all categories of passengers, including senior citizens, is not desirable. In spite of these challenges, the Indian Railways has continued to provide fare concessions to four categories of persons with disabilities, 11 categories of patients, and students.”

In another written reply, this time in the Lok Sabha on July 27, Vaishnaw said that the government gave a subsidy of Rs 59,837 crore on passenger tickets in 2019-20. “This amounts to a concession of 53 percent on average, to every person traveling on the railways. This subsidy is continuing for all passengers.” He was replying to a question by three MPs, including BJP’s Tejaswi Surya, on whether the withdrawal of concessions was a permanent measure and what were the earnings stemming from this decision.


Parliamentary panel joins chorus

Now, the standing committee on railways has urged the IR to consider re-introducing the concession for senior citizens. “The committee desires that the concession to senior citizens, which was available pre-Covid, may be reviewed and considered at least in sleeper class and III AC urgently so that the vulnerable and genuinely needy citizens could avail of the facility,” the MPs have said in a report tabled earlier this week. They also asked the IR to re-introduce the ‘give it up’ scheme, where senior citizens able to pay the full fare voluntarily gave up the concession.

The MPs’ demand comes even as another category of concessions — those provided to IR’s employees in the form of privilege /complimentary passes, even after retirement — has also come under the scanner.

The parliamentary panel has asked the railway ministry for data on these passes, and to establish a mechanism for preventing their misuse. “The ministry does not maintain any separate data about the number of privilege and complimentary passes issued to employees. They do not even maintain data on revenue lost due to such concessions,” the panel said.

The ministry, in its reply, has said that the entire mechanism has gone online from 2020 and data is available. However, there is no data about revenue loss to the transporter due to these concessions.


The MPs are also of the opinion that the flexi-fare scheme applicable on premium trains should be reviewed. This scheme has seen much heartburn and several reviews since it was introduced in 2016. Under this scheme, fares increase as occupancy inches

upwards per a pre-defined formula on Rajdhani, Shatabdi and Duronto trains. As of now, the fare increases with every 10 percent increase in berths sold, with the highest fare not exceeding 1.4 times the base fare.

Since the scheme’s introduction, the slab-wise fare increase has been pruned and now, the IR even offers discounts on trains that do not have high occupancy.

But the MPs want further revisions under the flexi-fare scheme: ``Though the committee is happy to note that the IR is rationalising flexi-fares, it is constrained to note that flexi-pricing

appears to be somewhat discriminatory, given that the fares of Rajdhanis, Shatabdis and Durontos are already higher than mail and express trains, and almost at par, and in some instances higher, than budget airlines… The committee recommends that in the greater public interest the ministry should review the flexi-fare mechanism and take a prudent decision on balanced pricing of fares.’’

The IR has said in its reply that trains with regular fares were also available for those who could not afford flexi-fares.
Sindhu Bhattacharya is a journalist based in Delhi who writes on a range of topics in business and economy.
ISO 27001 - BSI Assurance Mark