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Any transportation service operator would kill to have the market power of Indian Railways. Other than a few godforsaken routes perhaps, demand is always far in excess of supply. And more than a century of neglect — and the lack of any realistic alternative — has inured its paying customers to uncomplainingly accept the lack of basic creature comforts or facilities, so long as they simply get from Point A to Point B, without more than the ‘normal’ delay.
Of course, no private service provider would have wanted to find itself in the position the Railways found itself in. It became a lab rat in India’s experiments with socialism, a tool for extending political patronage and a milch cow for successive finance ministers seeking to plug the yawning gaps in their budgets.
Now, all that is looking set to change. The new railway minister has brought in some welcome pragmatism, as well as much needed focus on the basic role of the Railways, as a core mover of the economic engine. The newfound focus on economics is already showing, with the Railways taking a leaf out of the books of the airline sector and introducing dynamic pricing, as well as the ‘premium tatkal’ quota in the allocation for last-minute bookings.
This has given passengers a glimpse into the real pricing power of the Railways. Last week, for instance, the premium tatkal fare for an AC 2-tier berth between Delhi and Mumbai on the Rajdhani surged to over ₹6,600 — higher than the fare on a couple of low-cost airlines for the same sector on the same day. This is a smart move, and it is likely to make good money on in-demand trunk routes, which is probably the reason the premium tatkal segment now covers 30 per cent of tatkal tickets, and half of all tatkal tickets are on dynamic pricing.
Extracting what the traffic can bear is all very well, but the Railways also needs to focus on customer service, if it is not to be accused of monopoly extortion. Modern washrooms, cleaner trains and stations, better meals… the list is long. And it can no longer claim it doesn’t have the money to do it!
Senior Associate Editor
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