Indian Railways run about 12900 passenger trains per day and the railways is losing around more than 40% of what they spend on passenger trains.
The trains like Rajdhani, Shatabdi are mostly preferred by elite class. So, it will not have a bearing on common man.
The cost of service is almost double of what is being charged from the passengers.
Freight business is already very expensive in India as compared to other countries in the world. Therefore, further increase in this area is not feasible.
Impact
The total number of passengers which travel per year on Indian Railways is around 840 crores. Out of this half of the passengers are sub-urban people which are only a losing traffic. The non sub urban traffic is 380 crores. Out of this 230 crores are exempted from flexi fares because they are ordinary second class. The upper class is only 14 crores in total. So this concept is going to affect very few people at present.
This system adopted by airlines as well takes care of yield management. It is important to see what the occupancies are. As the occupancies shrink, fares go up so that maximum yield per seat can be obtained on an average coach. This method is quite successful in airlines. When trains are full all the time, there is no question of yield management.
The Rajdhanis and the Shatabdis are premium trains, which are favoured by the relatively better off. Those who plan their journeys later or in case of an emergency will be at loss.
ECONOMY AND INFRASTRUCTURE
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