Lok Sabha Question No. 302 (STARRED), answered on 2018-08-08
Subject: Flexi-Fare System
Ministry: RAILWAYS
Asked by: CH. MALLA REDDY, K. MARAGATHAM

## GOVERNMENT OF INDIA MINISTRY OF RAILWAYS

## LOK SABHA STARRED QUESTION NO. 302 TO BE ANSWERED ON 08.08.2018

## FLEXI-FARE SYSTEM

*302.  SHRI CH. MALLA REDDY: SHRIMATI K. MARAGATHAM:

Will the Minister of RAILWAYS be pleased to state:

- (a)    whether  the  Comptroller  and  Auditor  General  (CAG)  in  its  report has  observed  that  after the  introduction of flexi-fare  system  in premium trains, fewer passengers travelled in these trains;
- (b)  if  so,  the  details  thereof  along  with  the  drop  in  occupancy,  in absolute and percentage terms, class-wise in these trains during the period from September, 2016 to July, 2017 along with the percentage of vacant seats;
- (c) whether CAG has also observed that the passengers are choosing air travel over trains on routes where fares in Rajdhani, Shatabdi and Duronto Express trains are higher due to the flexi-fare system and if so, the reaction of the Railways thereto;
- (d)  the  additional  revenue  earned  by  the  Railways  through  flexi-fare system which otherwise could not have been possible through normal fare system; and
- (e)  whether  the  Railways  has  reviewed/proposes  to  review  the  flexifare system, if so, the details and the outcome thereof and if not, the reasons therefor?

## ANSWER

MINISTER OF RAILWAYS, COAL, FINANCE AND CORPORATE AFFAIRS SHRI PIYUSH GOYAL)

)

(a) to (e):   A Statement is laid on the Table of the House.

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STATEMENT REFERRED TO IN REPLY TO PARTS (a) TO (e) OF STARRED QUESTION  NO.  302  BY  SHRI  CH.  MALLA  REDDY  AND  SHRIMATI  K. MARAGATHAM  TO  BE  ANSWERED  IN  LOK  SABHA  ON  08.08.2018 REGARDING FLEXI-FARE SYSTEM

- (a)  &  (b):  The  Comptroller and Auditor General (CAG) in its report has observed  that  after  the  introduction  of  flexi-fare  system  in  premium trains, fewer passengers travelled in these trains.

However, Railways' contention is as follows:

- (i)  Number  of  passengers  booked  in  the  trains  having  flexi  fare  has registered an increase of 1.37% for the period September 2016 to June 2018  (Flexi  Fare  period)  as  compared  to  corresponding  period  of previous  years (Non Flexi Fare period).

Comparative  increase  in  actual  number  of  passengers  during 09.09.2016  to  30.06.2018  (flexi  fare  period)  vis-a-vis  09.09.2014  to 30.06.2016 (non-flexi period) in flexi fare trains is as under:-

| Period                                       | Actual passengers   |
|----------------------------------------------|---------------------|
| 09.09.2014 to 30.06.2016 (non-flexi period)  | 52.32 Million       |
| 09.09.2016 to 30.06.2018 (flexi fare period) | 53.04 Million       |
| Absolute increase                            | 0.72 million        |
| % increase                                   | 1.37%               |

- (ii) The CAG  report has assessed the first 11 months of the implementation of Flexi Fare system. Since Advance Reservation Period (ARP)  of  trains  is  120  days,  the  actual  assessment  would  have  been only  four  months  after  introduction  of  this  scheme  on  09.09.2016. Besides, the months of February 2017 and March 2017 were lean period when normally most of the trains have comparatively lower occupancy.

- (iii) Trains with Flexi fare i.e., Rajdhani, Shatabdi and Duronto constitute  only  approximately  1.11%  of  total  number  of  trains  over Indian  Railways.  First  four  months  after  introduction  of  Flexi  fare consists  of  Advance  Reservation  Period.  This  was  followed  by  lean period  for  passenger  traffic.  Therefore,  initial  drop  in  occupancy  in trains with flexi fare does not indicate drop in overall occupancy over Indian Railways.

(iv)  Occupancy  of  the  trains  varies  during  peak,  non-peak,  festival seasons,  special  occasions  and  weekends  etc.  Therefore,  sometimes the  trains  run  with  higher  occupancy  (more  than  the  berth  potential) and sometimes during non-peak periods, some berths remain vacant.

Class-wise  number  of  passengers  booked  in  Rajdhani,  Shatabdi and Duronto Express trains (trains with flexi fare) from September 2016 to July 2017 vis-a-vis September 2015 to July 2016, absolute variation and percentage variation are as under:

| Class   |   September 2015 to July 2016 |   September 2016 to July 2017 |   Absolute variation |   Percentage variation (%) |
|---------|-------------------------------|-------------------------------|----------------------|----------------------------|
| 1A*     |                        344515 |                        352763 |                 8248 |                       2.39 |
| 2A      |                       2932115 |                       2652896 |              -279219 |                      -9.52 |
| 3A      |                       9931776 |                       9996277 |                64501 |                       0.65 |
| 3E      |                        285381 |                        276562 |                -8819 |                      -3.09 |
| CC      |                      10429062 |                      10173920 |              -255142 |                      -2.45 |
| EC*     |                        875471 |                        890387 |                14916 |                       1.7  |
| SL      |                       2084983 |                       2180848 |                95865 |                       4.6  |
| Total   |                      26883303 |                      26523653 |              -359650 |                      -1.34 |

The above table is for the period September 2016 to July 2017 (as asked for in the Part 'b' of the question). However, the passengers booked  have  increased  by  1.37%  for  the  complete  flexi  fare  period upto  June  2018  as  compared  to  corresponding  period  of  previous years (non flexi fare).

(c):  The  CAG  report  has  observed  that  decrease  in  occupancy  in premier trains did lead to passenger shifting to air for travel in these sectors (13 sectors assessed by CAG)

However, Railways' contention is as follows:

- (i)  Railways  and  Airlines  are  different  modes  of  transport,  which  are not  comparable  in  the  terms  of  volume,  connectivity  as  well  as convenience.
- (ii)  There  is  no  fixed  maximum  limit  of  fare  in  Airlines  whereas Railways  have  fixed  maximum  fare  throughout  the  year.  Airline  fare varies excessively depending on time of operation, stoppages, travel duration, Origin -  Destination pair,  carrier etc. Railways' fare may or may not be higher than the air fare depending upon the class of travel as well as the peak or lean periods. It is the choice of the passengers to opt either Railway or Airlines for travelling as per their convenience. (iii)  Alternative  train  services  on  normal  fare  structure  are  available over Indian Railways on the routes of Rajdhani, Shatabdi and Duronto trains.
- (iv)  Railway  also  serves  a  large  number  of  passengers  boarding/deboarding at intermediate stations.
- (v)  The average occupancy of all reserved accommodation including routes  of  flexi  fare  trains  during  2015-2016  (Non-flexi  period)  was 101.15% which has gone up to 105.80% in 2017-18 (Flexi period). This shows  that  there  has  been  no  loss  of  traffic  by  Indian  Railways  to other mode of transport like Airlines.

(vi)  Sectors assessed by CAG are typically very long distance sectors like Mumbai-Kolkata and Chennai-New Delhi. Trains take around 26 to 28 hours for travel on these sectors while the same journey is done in 1.5 to 3 hours by air.

(d):  Additional earnings due to flexi fare upto June 2018 in comparison to corresponding previous years are as under:

| Period                       |   Additional earnings (Approx.) ( ` i n Crore) |
|------------------------------|------------------------------------------------|
| September 2016 to March 2017 |                                            371 |
| April 2017 to March 2018     |                                            864 |
| April 2018 to June 2018      |                                            265 |
| Total                        |                                           1500 |

(e): A committee was constituted to review the flexi fare system. The committee has submitted its report and the same is under examination.

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