Advance reservations give rail earnings a boost

Passenger earnings see a rise of 20% with reservation period doubled to 120 days; total earnings up 18%

April is set to go down in the history of the Indian Railways as the period that marked the beginning of a rise in earnings for the national transporter. Passenger earnings grew by a record 20 per cent during the month, pushing total earningsupbyoverayearbefore a historic 18 per cent, thanks to a simplesteptakenbytherailministry — doubling the advance reservation period to 120 days.

The ministry had informed all zonal railways on February 27 that this period was being increased from 60 to 120 days with effect from April 1. It asked Centre for Rail Information Systems (CRIS), its information technology arm, to tweak the reservation software accordingly. So, reservation could be booked on all days between April 1 and July 30 for trains leaving on July 30.

According to data shared by the ministry, on April 1, the first day of implementation, total ticket bookings through the Indian Railway Catering and Tourism Corporation website jumped to 1.34 million from 590,000 the previous day; the total number of passengers booked increased to 3.2 million from 1.1 million the previous day; and total ticket revenue collected jumped to ~250 crore from ~76 crore the day before.

Also, revenue collection on reservation counters rose over three times to ~217 crore compared to ~ 64 crore on March 31, indicating how the new trend is likely to lead to higher earnings for Indian Railways. “The main reason for the record earnings in the passenger segment is the extra money being collected through the advance reservation period,” a rail ministry official said.

However, a former railway financial commissioner said the trend reflects only an artificial riseinearnings, asthetotalnumber of tickets on offer remains the same. “The money collected through sale of tickets for the extra two months advance period would allow the railways to marginally increase its operating ratio at the end of the financial year as they will get to keep the money longer. But the gains would vanish to a large extent at the end of the year,” he said. He said a similar initiative was taken by the ministry to increase the advance reservation period to 90 days during Lalu Prasad’s tenure as rail minister between 2004 and 2009, but it had to be withdrawn.

The rail ministry’s high passenger earnings in April came on the back of a 3.8 per cent decline in passenger volumes to 658 million, indicating higher fares have also played a part in jacking up earnings. Passenger fares were increased by five per cent in June 2013, two per cent in October 2013 and 14.2 per cent in June 2014.

The Indian Railways’ freight earnings also jumped 16.8 per cent to ~9,552 crore in April, despite a mere seven per cent increaseinfreightvolume, to89.8 million tonne. The rail ministry had raisedfreight ratesby5.8per cent in April 2013, 1.7 per cent in October 2013 and 6.5 per cent in June2014. Also, acongestionsurcharge of 10 per cent is being levied on all goods traffic, including containers originating from ports, since November 2014. Railways Minister Suresh Prabhu had increased freight rates by an average of three per cent across commodities in the recent rail Budget.