Why are train tickets selling so well at Rs. 15,000 for a train ticket in Delhi?

Introduction

Railways, like most other industries, have had to contend with rising costs, with the government having set aside more than Rs. 1,100 crore in 2016 to help meet those expenses.

In addition, the government has made significant changes to the railway ticketing system, which has become increasingly cumbersome and more expensive.

But one railway ticket at a time?

A new study published on Friday suggests that the problem of high-ticket prices could be resolved in a matter of weeks.

The research, titled The Economics of High-Ticket Prices in India, found that a railway ticket for a passenger from Mumbai to Delhi can be sold for Rs. 16,000, with a similar price for a similar journey from Delhi to New Delhi.

This is despite the fact that the price of electricity in India is already a lot higher than that of the United States, with electricity prices running up to Rs. 35,000 a kilowatt hour (kWh).

In a report, Ramesh Gupta, co-author of the paper, said the research had shown that a train pass purchased at Rs 15,500 per train could be sold at Rs 16,500 by a train conductor from Mumbai, which would result in an increase in demand for the ticket.

The research, however, did not account for how the cost of the ticket would be determined.

The authors did not give any specific figures for the cost, but said that the cost would be fixed.

“We have found that ticket prices for trains, especially for long distance ones, are being influenced by the number of passengers on board,” Gupta said.

“In cities like Mumbai, it is difficult to sell a ticket for more than 10,000 people, as the number will be much less than the number that can afford the ticket.”

The authors said that their research was not meant to be a scientific study but rather to demonstrate the impact of railway fares on the price that is being charged for trains.

The report, which was presented at a seminar on rail fares at the Institute of Economics and Finance in Mumbai, was based on data from the railways, which showed that train prices were much higher in cities like Delhi and Mumbai than in rural areas.

“While prices for long-distance trains were higher in rural India, in cities, the opposite is the case,” Gupta added.

The authors estimated that the prices for tickets would increase by 25-30 per cent for long trains and 50-60 per cent on longer ones, which is because passengers who travel on long- distance trains would be more willing to pay for the journey.

The data shows that the railways have to increase the price on tickets to meet increasing demand.

“The increase in the cost for long distances was driven mainly by the increased number of people who are going on longer journeys.

This would mean higher prices for longer trains, which could also affect prices for short-distance travel,” Gupta explained.

“On the other hand, there are fewer people on short- distance railways, hence there is less demand for long trips.”

While the report showed that the increase in fares for long journeys would lead to higher prices, the authors said this did not mean that the railway would have to go back to its old way of pricing tickets.

“This would be good news, as long as the railways are able to meet the demand of passengers, which they have been doing,” Gupta concluded.

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