How the Railways the artificial pricing and flawed ticketing process is allowing tickets touts to skim off hundreds of crores a year

In part 1, Moneylife showed how the higher classes of travel on railway trains were being subsidised by the unreserved general class travellers and pointed towards how the concept of totally unreserved trains on certain routes and at certain times of the year were money spinners for the Indian Railways. In effect, what used to be called the “White Man’s Burden” in the colonial days has now become institutionalized in favour of the neo-colonials in Independent India.

And this disparity is growing. Lower revenue earning sleek luxury trains with brand new coaches like Rajdhanis, Durontos and Shatabdis get priorities on scarce shared resources like path, platform, waiting rooms, manpower, track, engine and station. The higher revenue earning freight trains, passenger, express and superfast trains with general unreserved compartments wait it out to provide a clear path—their rakes usually consisting of older coaches and low maintenance as well and nil facilities.

This then brings out the next part of the series: Why is reservation of railway tickets such a major issue almost throughout the year, especially but not restricted to peak seasons?

To help reach some answers, the writer not only analysed reports on the subject by Indian Railways, CAG, CRIS and other entities, but also discussed the issue with past and present employees of the Railways who have thorough knowledge of passenger reservation systems. In addition, contact was established with some technologically savvy touts and ticket providers, who know an assortment of methods by which to beat the system.

Also, I myself went through a large number of bookings and cancellations as well as analysis on some routes (typically Delhi-Patna, Delhi-Mumbai/Pune, Delhi-Bengaluru and Delhi/Goa and some more including what is probably the only one-way train in India, the 02779 on the Goa-Bengaluru route) and used three different identities in the bargain. Here’s how the Indian Railways, constantly complaining about a lack of resources, is on the other hand letting this huge amount of revenue leak through.

There are approximately 105,000 tickets kept aside for Tatkal reservations on a daily basis. Of this, it is estimated that at the very least 60% of them are booked with the assistance of agents, touts and others. The typical unauthorised add-on charges levied by the touts vary from about Rs300 for sleeper class to about Rs3,000 for 2AC tickets. This can be easily re-verified with any tout at any PRS centre, especially if you choose to go there around 4 or 5 in the morning, hoping to be first in queue, only to discover people are already sleeping or sitting in position from the night before.

Taking even Rs1,000 as an average, that is a straight Rs6-Rs7 crore worth of cash industry, everyday, thanks to Tatkal tickets because the present system of booking Tatkal tickets creates more problems than it solves. The big problems with Tatkal tickets are that:

(a) there is a fixed official premium for a product that has a much larger demand than supply and therefore people are willing to pay more as well as go through fake identity options.
(b) all the Tatkal bookings open at one fixed time—the day before the actual date of departure of the train—and therefore there is this huge surge and crowd, both physical and online.

The railway authorities have ostensibly been trying to solve this issue by making the process even more complicated, which only benefits the touts and others outside the system some more, without applying the real fixes, which are to:
a) make the premium dynamic, by a process of automated bidding, which handled transparently and simply, would remove all outside interventions.
b) make the timeline of these Tatkal bookings relative to the scheduled departure of the train.

The revenue currently lost would accrue to the railways. This is like dynamic pricing on airlines—some of us will recall paying premiums for airline seats when prices were fixed, and how that has vanished now that the airlines are allowed to vary pricing within price bands as per demand. This is simple yield management, and not rocket science—and it also permits the various discounted and other fares to co-exist.

This suggestion came from somebody within the Railways, as well as others who follow the subject, and when it was discussed with some touts, they were all universal in agreeing that it would put them, the touts, out of business. What better validation do you need?  And the revenue generated would be diverted to the Indian Railways—whose perishable commodity the reservation is, in the first place.

(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love-writing.)