The Indian Railway Catering and Tourism Corporation (IRCTC), a PSU of Indian Railways, has decided to reintroduce the convenience fee, which was suspended on the Union Finance Ministry’s advise after demonetisation in November 2016 to encourage digital transactions, with effect from Sunday.
Those booking online train tickets from Sunday through www.irctc.co.in will have to shell out ₹15 and ₹30 plus taxes as convenience fee per ticket for sleeper class and air-conditioned classes tickets, respectively. This is in addition to the payment gateway charges, if any. Those using UPI for the transaction would be charged ₹10 and ₹20 plus taxes for sleeper class and air-conditioned classes tickets, respectively.
In a letter to the Centre for Railway Information Systems (CRIS), Indian Railways’ information technology arm, on Saturday, IRCTC said the Railway Board had approved the corporation’s proposal to levy the convenience fee. It asked the CRIS to make necessary changes in NGeT system to apply the changes for online booking of all tickets through IRCTC. The corporation had suspended collection of convenience fee of ₹20 and ₹40 for sleeper and AC classes from November 23, 2016. The Finance Ministry, which used to reimburse part of the expenses, had told IRCTC that reimbursement cannot continue, according to the corporation’s chairman and managing director M.P. Mall.
Cost recovery
Mr. Mall told The Hindu , “Every service has a cost and if the cost is not recovered, we cannot sustain.” The corporation may offer some promotional scheme for UPI transactions, he added.
Mr. Mall said the corporation had earned a revenue of ₹700 crore from convenience fee during 2015–16 and it was expecting to earn about ₹550 crore following reintroduction of the fee in 2019–20.
‘Waiver helped Railways’
Sanjeev Dyamannavar from Prajaa.Raag, a mobility initiative in Bengaluru, said no online service provider levies charges like this. Online ticket booking had helped the Railways to maintain minimum number of staff at its reservation counters while people also benefited from round-the-clock booking facility. Now, people may travel distances to reservation counters, he said.
Yogendra Swamy from Mysuru Grahaka Parishat said that while on the one hand, the government says ‘go digital’, and on the other, it levies charges for digital transactions.
Ticket sales increased post-waiver
IRCTC’s online ticket sales witnessed 18% increase, from 2,092 lakh tickets in 2016–17 to 2,466.47 lakh tickets in 2017–18, after the convenience fee was suspended on November 23, 2016.
Though its total turnover came down by ₹70.75 crore — from ₹1,538.93 crore in 2016–17 to ₹1,468.18 crore in 2017–18 post-waiver, its net profit rose by ₹7.33 crore — from ₹214.69 crore to ₹222.02 crore — during the period.
IRCTC’s total income in 2015–16 was ₹1,522.23 crore and net profit was ₹197.29 crore when the convenience fee was collected for the whole year.
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