Buying train tickets online could soon be cheaper as the government has proposed to scrap or substantially reduce the service charge on such bookings. The Indian Railway Catering & Tourism Corporation, a subsidiary of the Indian Railways that handles online bookings, charges Rs 40 for every ticket purchased for air-conditioned classes and Rs 20 for non-AC sleeper classes.
The service charge won’t be collected on bookings from November 23 to December 31 to help passengers and incentivise online payments, IRCTC said in an update on its website. The government demonetized high-denomination currency notes on November 9. In the wake of the cash crunch in the country because of the demonetization, the railways wants to digitise its entire payment receiving mechanism.
The move is also a priority on the Prime Minister’s cashless economy project, which is being spearheaded by Union ministers Piyush Goyal and Ravi Shankar Prasad.
“We have suggested IRCTC either do away or substantially reduce the service charge as the Prime Minister wants that online transactions should not be expensive than over-the-counter payments,” a senior government official said.
“They could expand their on-board catering business, which is much more profitable, and look at other avenues like setting up premium lounges at stations.”
It will be a difficult decision for IRCTC to make because almost 33% of its revenue comes from the service charge collected on online bookings. About Rs 540 crore of IRCTC’s revenue of over Rs 1,500 crore in the last financial year came from ticket bookings, which also contribute to the dividend it pays to the railways.
Close to 12 lakh train tickets are purchased on the IRCTC website every day, accounting for almost 55% of all the railway bookings in the country. If a higher proportion of bookings shifts to IRCTC, it would help the national transporter cut costs by reducing the number of ticket booking counters. “Railways doing away with service charge would be a big step towards fulfilling PM’s agenda,” the official said.
The service charge won’t be collected on bookings from November 23 to December 31 to help passengers and incentivise online payments, IRCTC said in an update on its website. The government demonetized high-denomination currency notes on November 9. In the wake of the cash crunch in the country because of the demonetization, the railways wants to digitise its entire payment receiving mechanism.
The move is also a priority on the Prime Minister’s cashless economy project, which is being spearheaded by Union ministers Piyush Goyal and Ravi Shankar Prasad.
“We have suggested IRCTC either do away or substantially reduce the service charge as the Prime Minister wants that online transactions should not be expensive than over-the-counter payments,” a senior government official said.
“They could expand their on-board catering business, which is much more profitable, and look at other avenues like setting up premium lounges at stations.”
It will be a difficult decision for IRCTC to make because almost 33% of its revenue comes from the service charge collected on online bookings. About Rs 540 crore of IRCTC’s revenue of over Rs 1,500 crore in the last financial year came from ticket bookings, which also contribute to the dividend it pays to the railways.
Close to 12 lakh train tickets are purchased on the IRCTC website every day, accounting for almost 55% of all the railway bookings in the country. If a higher proportion of bookings shifts to IRCTC, it would help the national transporter cut costs by reducing the number of ticket booking counters. “Railways doing away with service charge would be a big step towards fulfilling PM’s agenda,” the official said.