Despite the recommendation by a parliamentary committee, the Railway Board is not keen to restore all concessions for senior citizens that were in place before the outbreak of the COVID-19 pandemic.
“Restoring concessions for elderly citizen to pre-pandemic levels will have a major impact on the Indian Railways’ financials. The question isn’t whether concessions will be restored but rather how concessions can go hand in hand with the railways’ finances,” a senior official from the rail ministry said. He added that the Railway Board is reviewing its strategy for concessions and no decision has been taken yet.
Another ministry official said that in order to improve customer experience, adopt better technology and increase its scale of operations, the railways needs funds to invest.
“Indian Railways has come out with largest contracts for wagons, coaches, trains and engines this year, the railways needs funds to come out with more such orders and needs to improve its financial health for the same,” the second official said.
Alternative concession models being discussed
While the Railway Board is not keen to restore discounts to pre-COVID levels, it is looking at five or so options to restore concessions for senior citizens.
One is to limit the concessions to non-AC travel only. “The logic is that if we limit it to sleeper and general classes, we cover 70 percent of travellers,” a railway official said.
The railways is also looking at a proposal to increase the age criterion for senior citizens to 65 for women and 70 for men.
Before being withdrawn during the coronavirus pandemic in 2020, the senior citizens’ concession was extended to women aged 58 and above and men aged 60 and above. While women were eligible for 50 percent concession, men and transgenders could avail 40 percent discount in all classes.
Another option the railways is considering to counterbalance the subsidy burden is to introduce the ‘premium tatkal’ scheme across all trains. This will help generate more revenue, which could offset the burden of the concessions. This scheme is currently applicable in around 80 trains.
Options like concessions based on travel history are also being looked at. Under this proposal, the rate reduction for elderly citizens will be based on the frequency of their travel.
“Concessions on last-minute bookings will be much lower than pre-booked and scheduled tickets,” another railway official said.
Say no to discounts?
The debate on restoring concessions for elderly citizens has been on for nearly a year now, after rail passenger volumes reached pre-COVID levels. Senior citizens across India have also been protesting demanding the restoration of concessions in railway fares.
The discussion was also brought up in Parliament during the monsoon session. While railway minister Ashwini Vaishnaw had said that restarting the concession “is not desirable”, the standing committee on railways has urged Indian Railways to consider reintroducing the discount. Bharatiya Janata Party Lok Sabha member Radhamohan Singh is the chairman of the parliamentary standing committee on railways.
Vaishnaw had also said that the national carrier 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. According to government data, revenue forgone by Indian Railways due to concessions in passenger fares to senior citizen passengers rose from Rs 1,491 crore in 2017-18 to Rs 1,667 crore in 2019-20.
Even the office of the Comptroller and Accountant General of India (CAG) in its report tabled in Parliament in December said the national carrier needs to revisit the passenger and other tariffs so as to recover the cost of operations in a phased manner and reduce losses in its core activities.
In 2019, the CAG’s report said Indian Railways has the worst operating ratio in the past 10 years at 98.44 percent and its revenue surplus has decreased by more than 66 percent, from Rs 4,913 crore in 2016-17 to Rs 1,665.61 crore in 2017-18.
The national transporter incurs a huge burden of around Rs 2,000 crore every year due to over 50 types of concessions it offers to various kinds of passengers. The senior citizen concession amounts to around 80 percent of the total discounts given by it.
The railways has in the past also tried to do away with discounts for the elderly. In July 2016, it made the concession for the elderly optional.
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