Indian Railway Catering and Tourism Corporation is set to face a decline of Rs 300 million ( Rs 30 crore) in revenues from sale of online rail tickets in the coming financial year as a result of the reduction in service charge announced in the Rail Budget last month.
In her Budget speech on February 24, Railway Minister Mamata Banerjee [ Images ] had reduced the maximum limit of service charge to Rs 10 from the earlier Rs 15 for sleeper class and to Rs 20 from Rs 40 for AC class.
A senior official at the corporation said: "We will take a hit of Rs 30 crore due to the reduction in service charge announced by the ministry."
Prior to the Budget announcement, IRCTC was expecting to make around Rs 1 billion ( Rs 100 crore) in earnings from online ticketing services in the current fiscal. This is now expected to reduce by 30 per cent.
The corporation has already sold tickets worth Rs 49 billion (Rs 4,900 crore) till February this year. According to IRCTC's projections, by the close of this financial year, ticket sales would touch the Rs 54 billion (Rs 5,400 crore) mark.
Focus on rural areas, petrol pump chains
With the Indian Railways planning to launch an alternate portal for online ticketing in the coming months, IRCTC has set conservative targets for itself in 2010-11. The official added: "On an average, we sell around 200,000 tickets a day with sales peaking at 370,000 tickets at times. Next fiscal, we intend to sell an average of 250,000 tickets everyday with total annual sale pegged at Rs 60 billion (Rs 6,000 crore)."
IRCTC's ticketing revenue has seen an increase of 462 per cent from three years ago. From Rs 70.49 billuion (Rs 704.9 crore) in 2006-07 and Rs 17.45 billion (Rs 1,744.7 crore) in 2007-08, the corporation got Rs 39.67 billion (Rs 3,966.98 crore) from sale of online tickets last year.
Another official informed that, while online ticketing sales was enjoying a good growth rate, the corporation was preparing itself for a setback because of the reduction in the service fee we charge. "Additionally, factoring in the competition we may face from Indian Railways' proposed portal, we are concentrating on increasing our reach to rural areas," the source said.
The corporation has, to this end, collaborated with 81 organisations and 11 state governments to operate multi-utility kiosks, which provide online ticketing services. IRCTC has further tied-up with Indian Oil Corporation [ Get Quote ], Bharat Petroleum Corporation [ Get Quote ] and Hindustan Petroleum Corporation [ Get Quote ] to provide e-ticket reservation facilities to people through their chain of petrol pumps and retail gas agencies.