Railways plans ‘dynamic fares’

Indian Railways is planning to go the way of the airlines. Railway Board officials are working on the pros and cons of introducing ”dynamic fares”, a concept which is elastic and based on demand.

“We are looking at various avenues, including dynamic pricing policy,” Railway minister Dinesh Trivedi said while addressing Economic Editors’ conference here on Wednesday. Under the dynamic fare system, ticket prices go up when the demand goes up and vice versa.

Dynamic fares will mean more that the prices of tickets will go up on busy routes. The Railways is also working on a formula for hiking the fares for all categories of passengers. There are also indications of an increase in the fare of second class travel in unreserved compartments.

Though Trivedi has been giving such signals since he took charge of the ministry, he has started revealing the modalities being worked out Railway Board manadarins. During an interaction with media persons on Wednesday, he said that there was an urgent need for “rationalisation” of fares for all categories. It is clear that ‘rationalisation’ will have all-round effect on passenger fares and freight charges. The Railways is considering making up for fuel cost and other expenses on passenger amenities.

While second class passenger fare has not been hiked for the past several years because of political considerations, the ministry is emphasising that an increase has become an imperative, especially because of the financial targets it wants to achieve over the next few years.


Published in: on October 26, 2011 at 7:01 am  Leave a Comment  
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