The Hindu Business Line : Upper class Rly fares fail to cover low-end loss

THOUGH a final decision on raising the passenger fares in the coming rail budget remains with the top political leadership, a closer look at Railway accounts show that the profit generated by the high-end fares is proving to be grossly inadequate to cover the losses of the low-end fares.

The latest detailed costing data of the Indian Railways for 2002-03 available with Business Line shows that the Railways starts going into the red right from the first class to the sleeper and II class. The 2002-03 is the latest data worked out by the Railways for their internal use since there is a considerable time lag in collating the cost data under various heads.

The non-air conditioned (AC) first class operations caused a loss of about Rs 72.14 crore in 2002-03. "Though on an individual basis, the first class tickets were priced above the cost, but since full capacity utilisation is not attained in the first class coaches, on a total count they end up making losses," pointed out an official. The second and sleeper class coaching services added a deficit of Rs 4855.33 crore in the Railways' kitty.

In fact, out of the total loss of about Rs 5735.6 crore, the mail and express trains, which are basically trains with AC compartments, accounted for Rs 1939.37 crore deficit; whereas ordinary trains, which do not have AC compartments accounted for Rs 2306.32 crore of loss. Also, the EMU suburban trains made a dent of Rs 630.49 crore in the Railway earnings. The total loss borne by the Railways on passenger coaching services worked out to a whopping Rs 5735.60 crore during the year, which is about 45.60 per cent of its total passenger earnings of Rs 12,575.44 crore for the year.

In the trains which offer a mix of AC and non-AC services, the loss of Rs 2621.16 crore caused by the non-AC segment has been absorbed partially by a total profit of Rs 681.8 crore generated by the AC-coaching services.

The costing data includes broad and metre gauge coaching services and excludes the costing data for passenger services offered on narrow gauge.

Ministry officials point out that increasing the fares of high-end segment such as AC is not a particularly desirable option — given the increasing competition from low cost airlines. Even though the low cost airlines have not really been able to cause a dent in the organisation's AC traffic till date, however, with more and more low cost airlines entering the market and thus increasing the capacity, Railways cannot afford to be complacent.

"Areas that need immediate attention are certain suburban segments, apart from the usual sleeper and second class operations," point out many officials.

"Indian Railways is one of the rare transport services where passengers haven't really paid for the usual level of inflation. Inflation may be low during the recent times, but it is there," pointed out a senior Railway official.

Meanwhile on the earnings side, the average rate charged per passenger per kilometre also shows a massive difference between the high and low-end segments. In 2002-03, in mail and express trains, each passenger travelling in AC-first class and AC sleeper paid 242.7 paise and 110.5 paise for every kilometre, where as a passenger in sleeper class and second class paid 28.8 paise and 23.5 paise respectively. Those travelling in AC 3-tier, AC chair car and first class paid 77.6, 76.8 and 86.7 paise respectively for every kilometre.

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