Up to 25% cut in AC train fares

INDIAN RAILWAYS ON Saturday slashed the fares of AC chair cars and executive classes of all trains with AC seating accommodation, including the newly-introduced Vande Bharat trains, as occupancy levels in many routes have plunged to as much as a third to a quarter of the capacity.

Zonal officers have been empowered to decide the exact discounts for specific trains and routes subject to a cap of 25%, after taking into consideration occupancy trends.

The idea is to boost passenger volumes, beat competition from alternative modes of transport like airlines and luxury buses wherever possible, and ensure that the revenue target set for FY24 is met.

Though passenger fares have risen in recent years thanks to policies like dynamic pricing, and the introduction of a slew of trains offering more comfortable travel, the segment continues to be heavily cross-subsidised by freight receipts.

Third AC sleeper cars and chair cars are the passenger categories that are break-even or profitable for the transporter, thanks to the combination of relatively high volumes and fares.

The transporter, which registered a steep 61% rise in passenger revenues in FY23 to ₹64,00 crore thanks to a favourable base and strategic fare adjustments, is aiming to collect ₹70,000 crore in the current financial year.