(1) Revenues from profit giving freight traffic and ac passenger traffic is consistently falling short of the target by about 10% since beginning of the Financial year. On the other hand CR carrying an impressive 2% annual growth in the highly subsidised suburban passenger traffic carried (and nominal 4% increase in revenue) in first half of current financial year. This contradiction is not a surprise.
(2) Highly subsidised non ac fares adopted by IR will continue to attract more and more passengers in these classes thereby increasing the losses of IR. On the other hand higher/special ac class fares shall compel the cash cow of IR (ac passengers) to switch over to economy airlines/ luxury buses.
(3)...
more... Fares of different classes should be broadly based on the actual costing and actual economic value of services provided (based on cost of similar service provided by airlines/road operators of the service).
(4) Fares should be dependent on facilities which are appreciable to travellers space in coach, privacy,ac ,interiors, mob. charging, wi-fi, water filter, pantry/dining car etc, speed of travel, journey time, kms (telescopicity), complexity of terrain/ permanent way. A train facilitating non stop run between two end destinations say 250 km or more may also be considered as a facility to traveller.
(5) A pre determined subsidy may be given to lower classes, say 10-15% subsidy on non ac sleeper class, 15-25% subsidy in general class.
(6) In case of ac classes, a nominal profit margin of 5-10% may be added to economic value/costing.
(7) All concessions (especially in ac classes) need to be reviewed, Limiting max. level of concessions to 40% of base fares instead of 75%/ 100% concessions in vogue in some cases.
(8) Last but most important, urgency is there to critically review/analyse each and every operation of IR, then to devise strategies for optimisation of each activity with a view to improve safety and optimisation of resources consumed, and then to go for massive innovation/ modernisation/ cost control exercise so as to improve the competitiveness of IR wrt airlines/ buses/ taxies.