The Indian Railways’ experiment to introduce AC III tier economy class coaches has started to pay off. Since its introduction, in the last one year, these coaches have earned the Railways more than ₹230 crore in revenue by ferrying around 21 lakh passengers. Fares in AC III tier economy are 6%-7% cheaper than the AC III tier class. The economy class has a capacity of 83 berths compared to 72 in the regular coach.
Only 370 such coaches have been used so far, but with demand picking up, the Railways has planned to add more such coaches. Data suggest that adding more AC III tier economy class coaches is a step in the right direction. In recent years, the operating margin of the Indian Railways has taken a beating. Latest data show that the Railways spends ₹98 to earn ₹100. It has consistently failed to meet the expected revenue internally, and its reliance on extra-budgetary resources such as funds from LIC and market borrowings has significantly increased.
Subscribe here to get the Data Point newsletter delivered to your inbox
