NEW DELHI: The parliamentary panel on railways has reiterated that railways should review AC fares, implement dynamic pricing models for AC classes and premium trains, and regularly review flexi-fare schemes based on demand while ensuring rail travel by low-income passengers remains affordable.
The panel headed by BJP’s C M Ramesh made these recommendations even as the railway ministry informed the committee that in case of suburban services the national transporter recovers only 30% of costs and in case of non-AC travel it’s 39%. Only AC travel generates around 3% surplus of the cost for railways.
In the action taken report (ATR) with regard to its earlier recommendations, which was tabled in Parliament last week, the panel said that a comprehensive fare review should be undertaken from time to time to align AC class fares with costs and ensure gradual, affordable adjustments for non-AC classes.
It said, “Railways should adopt a comprehensive, multi-pronged strategy to enhance net revenue while ensuring affordability for low-income passengers. This includes implementing dynamic pricing models for AC classes and premium trains, regularly reviewing flexi-fare schemes based on demand, and expanding non-fare revenue through initiatives like e-auction policies, advertising, and commercial utilisation of railway assets.”
The committee added that to “balance social obligations”, railways should continue targeted subsidies for suburban and non-AC travel. It said, however, operational efficiency must be improved through accelerated electrification and energy efficient technologies.
The committee had given similar recommendations in its first report on Demands for Grants (2024-25) of the railway ministry in December 2024.
As per Budget document, revenue from all AC fares is about 72% of the entire earnings from passenger segments in 2024-25.