On October 16, if you had logged on to the IRCTC website and were looking for a ticket on August Kranti Rajdhani Express from Mumbai Central to New Delhi’s Hazrat Nizamuddin station (train number 12953) for the following day, you might have had a mini-stroke as the minutes ticked by. At 10.01 am, you would have had to pay Rs 2,740 for an air-conditioned 3-tier berth (which normally costs Rs 2,030 and Rs 2,390 on tatkal). It would have gone up to Rs 3,530 within 10 minutes, and by 10.37 am to Rs 6,294.

Ask Ankit Lal, who was doing precisely that – booking a Delhi-Mumbai Rajdhani ticket – two days before that. Lal, who looks after social media for the Aam Aadmi Party, had to travel on October 19 when he chanced upon 22913-Mumbai Central –New Delhi Tri- Weekly Premium AC Superfast Special. Glad to find a seat available, as he could not find it in any other train running that day, Lal clicked on to book it. After filling the required details, he got a “shock”, and the fare: Rs 6,507.

Date: 16-10-2014
Time: 10:01
Train No: 12953
From: BCT To: NZM
Class: 3A Fare: Rs 350

Date: 16-10-2014
Time: 10:07
Train No: 12953
From: BCT To: NZM
Class: 3A Fare: Rs 745

Date: 16-10-2014
Time: 10:13
Train No: 12953
From: BCT To: NZM
Class: 3A Fare: Rs 1,930

Date: 16-10-2014
Time: 10:18
Train No: 12953
From: BCT To: NZM
Class: 3A Fare: Rs 3,114

Date: 16-10-2014
Time: 10:37
Train No: 12953
From: BCT To: NZM
Class: 3A Fare: Rs 3,904

Rise in fare under premium tatkal quota
in August Kranti Rajdhani Express (12953) on Oct 16

Welcome to the world of ‘dynamic pricing’ of Indian Railways. Shorn of verbiage, it means the market – or the proverbial demand-supply ratio – determines the fare – “like in airlines”, as railway officials take pains to explain. So, a dynamic fare of Rs 350 (over and above Rs 2,030 AC 3-tier regular fare and Rs 350 tatkal fare) at 10.01 am on October 15 would jump to Rs 2,324 in 15 minutes, and Rs 3,904 at 10.37 am – a thousand percent leap in 36 minutes flat.

Just to put it in perspective, around 5 pm on October 21, a Delhi-Mumbai direct flight for October 22 cost Rs 4,999 on cleartrip.com – across airlines, from 7.05 am to 11 pm.

The railway budget this year announced 17 premium trains on some of the busiest routes, on which premium fares would apply at all times – their “days of running” are “notified separately from time to time”, according to the railways website that lists the trains. AAP’s Ankit Lal had chanced upon one of these trains.

These apart, 29 trains operating on dynamic pricing is running on different routes at present. ‘Premium tatkal quota’ was introduced in selected trains during December last year.

In all, there are 64 trains in which 50 percent of the existing tatkal quota is being sold under the dynamic fare scheme.
After half the tickets are booked under regular tatkal for a train, the other 50 percent of the tatkal quota, defined as premium tatkal quota, is sold on dynamic pricing.

A win-win situation for railways?
While there has been large-scale resentment among people against such hefty pricing, many also see this as a way to ensure tickets for those who can afford them. After all, Indian Railways is not all about charity, but the services should keep pace with the fares, goes the logic. Vijay Laxmi, an NCR-based chartered accountant who travels frequently on work, says, “I don’t mind paying more, but the quality of food and other services provided even in the best trains does not warrant such huge amount”.

Justifying the scheme, a railway official says, “People pay hefty amounts to touts who buy tickets illegally beforehand and sell them to passengers at very high rates. Now, a small part of the total seats is being offered to people who are willing to pay more. The money which was going to the touts will now come to railways.”

The trains which will have premium tatkal tickets are identified by the 16 railway zones.

DP Pande, member (traffic), Railway Board, says the cash-strapped railways, which provides highly subsidised services, aims to reduce the losses through profits earned by this new system of ticket pricing.

“We have introduced tatkal quota in approximately 4 percents of trains,” Pande says. “There are around 65 trains in which dynamic pricing has been introduced for half the tickets available in tatkal quota. The railways is earning approximately '23 lakh on an average every day since we initiated this facility.”

In all, Pande says, the railways has earned around Rs 3.35 crore between October 1 and 18 through dynamic pricing.

About complainants that fares have rocketed due to this, Pande says, “We have reserved only a part of the total tickets available (to be sold under premium pricing). Moreover, one should understand that tatkal quota is a facility, and not a right. Passengers get most facilities and services in Indian Railways on very subsidised rates. This is meant to increase the earnings of railways.”
But Jai Mrug, an IIT-Bombay graduate who writes on railways and specialises in studying poll-related statistics, says, “By doing this (premium ticketing), the railways is setting the stage for pricing itself out of the market.”

He says the railways “unfortunately” has got on to a “simple path of creating scarcity as a way out of its financial problems.” Scarcity was initially created by introducing the tatkal quota, and now it’s set to get worse with premium tatkal quota, Mrug says. “In the busy season one can find a ticket even a month in advance but a person who knows that he has to travel after 15 days will prefer to have tickets in airlines, as it will cost the same, or perhaps even less, than a ticket in the premium tatkal quota.”

Comparing the airlines sector, which has benefitted from dynamic pricing, with the railways, Mrug says, “Airlines did not have touts, who could by tickets in advance and sell it later.”

Ankit Lal, who is not averse per se to the premium ticketing facility, says the system needs to be rationalised. “When I booked the ticket, around 400 tickets were available,” he says. “I can understand fares shooting up if, say, the last 10 or so seats are available. But when sufficient number of seats is available what sense does it make to raise the fare so much?”

Defending the scheme, AK Kathpal, DRM, Ambala Zone, says, “Everyone knows that the railways is cash-strapped and needs money. This (premium fares) will get railways substantial revenue. It has been approved by the railway board after due consideration of all aspects.”

Anyone buying a ticket under this scheme can be certain of a confirm seat since there is no provision of wait-listing in premium tatkal tickets. But unlike routine tatkal tickets, and like some low-coast airlines, these tickets are non-refundable, and thus cannot be cancelled.

According to a railway official, they are waiting for the end of the season to ascertain the response of the scheme, though initial figures indicate a “positive response”.

Approximately 17 per cent of train tickets were available for tatkal booking in 2013-14, and the railways earned around Rs 1,300 crore from the sale of ticket under tatkal quota. At present, tickets sold under tatkal charge 10 percent of basic fare for second class and 30 percent of basic fare for all other classes.

The story appeared in November 16-30, 2014 issue