New Delhi: In a relief for passengers during the ongoing festive season and give airlines a run for their money, the Indian Railways on Wednesday scrapped its flexi-fare system in 15 premium trains in which the occupancy is less than 50 per cent throughout the year. Also Read - Centre to Sell Stake in Certain Pharma PSUs, Says Piyush Goyal

The Railways also discounted the scheme in 32 other trains during lean periods when occupancy dips to 50-75 per cent. It also reduced flexi fares from 1.5 to 1.4 times the base ticket fare in 101 trains, Railway Minister Piyush Goyal said Wednesday. Also Read - FDI Inflows Rise 18% to $73 bn in FY20, Says Union Minister Piyush Goyal



The step comes in the wake of the Comptroller and Auditor General (CAG) report in July that had flagged the dipping occupancy level since the scheme was introduced in September 2016 and had recommended rationalisation of flexi-fare. Also Read - Coronavirus: Cabinet Secretary Holds Video-Conference With States As Lockdown 4.0 Nears End | Highlights

Some trains in which the scheme will be discontinued because of low occupancy include Kalka-New Delhi Shatabdi, Howrah Puri Rajdhani, Chennai-Madurai Duronto.



The trains in which flexi fares will not be applicable during lean periods include Amritsar Shatabdi, Indore Duronto, Jaipur Duronto, Bilaspur Rajdhani, Kathgodam-Anandvihar Shatabdi, Ranchi Rajdhani among others.

On September 9, 2016, the railways had introduced flexi-fare for premier trains: 44 Rajdhani, 52 Duronto and 46 Shatabdi Express trains.

Under this, the base fare increases by 10 per cent with every 10 per cent of berths sold, subject to a prescribed limit. There was no change in the existing fare for first AC and economy class.

“As a gift to passengers this festive season, Railways has decided to reduce Flexi Fares from 1.5 to 1.4 times the base ticket fare, and to completely remove Flexi Fares from trains with less than 50 per cent occupancy,” the minister tweeted.

“Win-Win Situation: The reduction of Flexi Fares is going to benefit both the passengers that can now avail tickets at cheaper rates, as well the Railways that will see a surge in demand and occupancy,” he said.

According to sources, the railways will incur losses of around Rs 103 crore by the changes brought into the scheme. They, however, added that railways will recover not just the losses but also generate additional revenue by increasing occupancy through the reduced fares.

Sources said a 15 per cent jump in occupancy of the 15 trains in which flexi-fare is being scrapped will compensate for the losses.

In July this year, the CAG in its report tabled in Parliament highlighted that tickets on the Indian Railways’ premium trains were much higher as compared to airfares.

It stated that while the introduction of the flexi-fare system in premium trains — Rajdhani, Shatabdi and Duronto — has led to increase in passenger earnings in this category of trains to Rs 552 crore, they have carried 6.75 lakh fewer travellers during the period between September 9, 2016 and July 31, 2017, compared to the corresponding period in 2015-2016.

In terms of absolute numbers, the premier trains carried 2.40 crore passengers during post-flexi fare period (September 9, 2016 to July 31, 2017) as compared to 2.47 crore passengers during pre-flexi fare period (September 9, 2015 to July 31, 2016), said the CAG in its report.

The decision assumes significance as it will enable the railways to lure more passengers that it had lost to other means of transport, especially the aviation sector.

In addition, the flexi-fare scheme will continue in over 100 trains in which uni-directional monthly occupancy is more than 75 per cent throughout the year.

(With PTI inputs)