IRCTC lost Rs. 693cr over service charge withdrawal: Details here
The scrapping of service charges for online ticket bookings has cost the Indian Railways Catering and Tourism Corporation (IRCTC) a whopping Rs. 693cr for the year 2017-18, according to the corporation's annual report. Losses resulting from scrapping service charges apart, the IRCTC's revenue from ticketing operations also saw a sharp decline, along with a significant decline in total revenue. Here are the details.
How the scrapping of service charges affected the IRCTC
Following the demonetization in November 2016, the IRCTC scrapped service charges - Rs. 20 for non-AC, Rs. 40 for AC - on online ticket bookings to incentivize passengers. Consequently, while the IRCTC sold 246 million tickets in 2017-18 - 18% higher than last year - its revenues did not reflect this growth. It's estimated that around 66% of reserved tickets are sold online.
In 2017-18, IRCTC's ticketing revenue dropped by 56%
Understandably, in 2017-18, the corporation's revenue from ticketing operations touched a miserable Rs. 204cr, down a whopping 56% from Rs. 466cr in 2016-17. While 2016-17's business too was hit by the scrapping of service charges, the changes were effected in November 2016, and hence business was affected for only part of the year. For comparison, in 2015-16, the IRCTC's ticketing revenue was Rs. 632cr.
IRCTC's total revenue dropped by a significant 3.1%
Meanwhile, the IRCTC's total revenues, which it earns from various services like onboard catering, license fees, Rail Neer sales etc., touched Rs. 1,544cr in 2017-18, down by a significant 3.1% from last year. The corporation also said in its report that the Ministry of Railways would compensate it for its annual expenditure of Rs. 80cr, spent on its online ticketing system, marketing, operations etc.
