Withdrawal of service charge on online ticket books costs IRCTC ₹693 crore

On average, around 6.75 lakh tickets were sold daily through IRCTC’s website in 2017-18.

The withdrawal of service charge on online ticket bookings -- one of the incentives offered to customers after demonetisation -- resulted in loss of business of ₹693 in 2017-18 for the Indian Railway Catering and Tourism Corporation (IRCTC), according to the corporation’s annual report.

A passenger using mobile phone for electronic ticketing system at Howrah Station in Howrah. (Hindustan Times via Getty Images)

In 2017-18, the corporation’s revenue from ticketing operations was ₹204 crore. This was 56% down from ₹466 crore in 2016-17. That year’s business too was hit by demonetisation (announced in November 2016; the service charge was removed on November 23 the same year), but only for part of the year.

In 2015-16, the corporation’s ticketing revenue was ₹632 crore.

On average, around 6.75 lakh tickets were sold daily through IRCTC’s website in 2017-18. Total tickets booked on the IRCTC website that year were 246 million, 18% higher than the number of tickets booked the previous year.

According to the report, Indian Railway Catering and Tourism Corporation’s e-ticketing service sells 65.83% of reserved tickets on Indian Railways booked online.

The loss of business is calculated by simply multiplying the number of tickets sold with the corresponding servcie charge.

IRCTC said in the report that the annual expenditure of ₹80 crore incurred on the ticketing system on the web site, marketing, operations and after sale service is being compensated by Ministry of Railways.

“The withdrawal of service charge on the tickets, though, has reduced the income from this segment; efforts are being made to encash full potential of website along with mobile application schemes by data monetization, e-auctioning and retail management,” said an IRCTC official who asked not to be named.

IRCTC witnessed a 3.1% decline in total revenue to ₹1,544 crore in 2017-18. Apart from ticketing, the corporation also earns money from sales of Rail Neer, onboard catering, and licence fees from outsourced catering vendors.