Indian Railways’ AC Chair car is 'operationally profitable': CAG

Indian Railways’ AC chair car services has joined the AC 3 tier segment in the list of categories that make operational profits, according to the Comptroller and Auditor General (CAG) report on Railway Finances tabled in the Parliament on Monday.

“All classes of train services have incurred losses during 2016-17 except AC 3 Tier and AC Chair Car which could recover its operational cost and made profit,” the Government auditor said in its report on the national transporter.

This is a breakthrough because for five years – from fiscal 2012-13 to 2016-17 -- AC 3 tier was the only category of service that made operational profit, according to the report.

This could be one of the reasons that explain Railways strategy to introduce trains like Vande Bharat Express and Tejas Express that have entirely AC Chair car arrangements. This is over and above the trains like the Shatabdi Express that have all AC Chair car seating arrangements.

Passenger trains of Indian Railways have traditionally run on operational losses. Usually, the national transporter has to control the passenger fares due to political and social reasons in certain segments like suburban travel segment. Also, there is competitive pressure from low-cost airlines and AC buses to keep the fare low in AC segments.

Subsidy provided to both ordinary trains (trains that travel across areas) and suburban services increased almost continuously in the last five years of fiscal 2012-13 and fiscal 2016-17, added CAG in its report for 2018.

The AC 2 tier segment, which provides more space per person than the AC 3 tier, saw a loss of 13.60 per cent. The loss on electrical multiple unit suburban train services was 64.74 per cent, said the auditor.

Analysis of concessional tickets

As concessional tickets — which are free or discounted tickets provided to certain kind of passengers — contribute to the non-recovery of costs, the CAG had also analysed various types of concessions.

During the three years, more than a tenth of reserved passengers have availed different types of concessions, it said. Reserved travel means that a passenger is entitled to a seat or a berth in a train.

Specifically, 11.45 per cent of the reserved passengers availed various concessions during the three year period, making railway give up about 8.42 per cent of reserved passenger earnings, said the report. More than half (52.5 per cent) of the concession amount was used by senior citizens, followed by concession to privilege pass holders (37.2 per cent).

In its new trains that Railways has introduced like Suvidha (which has AC and mixed passengers), Humsafar trains (fully AC 3 tier trains), the fully AC chair car Tejas Express, Railways has not allowed or limited the use of concessions or discounted tickets.

Misuse of concessions

While analysing concession data, the CAG has found cases of “freedom fighter” concessions being used by people born after 1947, the year when India attained freedom.

The CAG found out that over 3,000 passengers born after independence had availed the freedom fighter concessions.

Railways provide free lifetime travel to freedom fighters and their companions for which two discount codes, FREEDM and FREECM, are used.

“The Railways passenger reservation system does not have appropriate input control to validate age of freedom fighters,” said CAG, adding that even a 10-year old person also issued a freedom fighter concession.

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