Indian Railways planning to increase its revenue; here's how

Indian Railways is working on a plan to increase its revenue in passenger segment. Interestingly, in the process, it is not going to increase passenger fares. Sources close to the development informed Zee Business' Sameer Dixit that the railways has decided to shift its focus on premium trains and will concentrate only on four categories of trains, namely Tejas express, Humsafar express, UDAY (Utkrisht DoubleDecker Air-conditioned Yatri), and Antyodaya Express.  

Antyodaya, Humsafar, UDAY and Tejas are the new age trains of Indian Railways equipped with new passenger amenities. However, the fares of all these premium trains are more than existing trains. 

The step will help railways to achieve few targets like improving its image by increasing the number of premium trains like Hamsafar and Tejas, and receive accolades from passengers besides filling its treasury through increased fares.

There were 24 Hamsafar (highest among all), Tejas, Antyodaya and UDAY trains in the fiscal year 2017-18, but in 2018-19, the government has planned to increase their numbers to 40. The number of these trains will be doubled in coming years. 

Railways also decided to augment air-conditioned (AC) coaches gradually in new trains, of which maximum trains will be 3AC coaches. The move clearly signals towards Hamsafar trains, which has shown positive results since they were launched. 

Actually, third AC coaches are always profit-making initiative and don't allow Railways to lose money. In terms of pricing, 3AC is the only segment that makes a profit, and a complete 3AC coaches train enables railways to earn around Rs 10-12 lakh. 

When it comes to fares, the Hamsafar train fare continues to be 15 per cent more than that of existing 3AC trains, and it continues to increase after every 10 seats are booked. But this increase has been capped at 1.5 times. Similarly, premium chair car train Tejas fare is 20 per cent higher than the fare of Shatabdi trains. 

A slight increase in passenger booking by increasing the number of these premier trains will help Railways to grow its treasury in a good way. To increase its earnings through Hamsafar and Tejas, it has revised its target of coach production in its factories by increasing annual production target of LHB coaches from existing 4,000 coaches to 6,000 coaches. In the revised target, 1,000 coaches will be 3AC coaches. 

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Railway is also planning to increase its revenue by adopting a backdoor entry as it is in no mood to hike the passenger fare, right now.