IRCTC’s waitlist policies and refund rules, including clerkage charges, GST deductions, and fees for unconfirmed tickets, significantly impact passengers. This article provides a clear overview of these practices and highlights potential solutions to promote greater transparency and fairness in Indian Railways.
IRCTC’s History and Services
The Indian Railway Catering and Tourism Corporation (IRCTC) is a Schedule-B Public Sector Undertaking (PSU) under the Ministry of Railways (MoR). Established in 1999 by the Government of India (GoI), its primary purpose was to manage catering, tourism, and ticketing services for Indian Railways (IR). Initially, 100% of IRCTC’s shares were government-owned. However, in 2019, the company was listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), allowing the public, Foreign Institutional Investors (FIIs), and Domestic Institutional Investors (DIIs) to hold stakes and reducing government ownership to approximately 62.40%.
IRCTC was set up with the basic purpose of hiving off the entire catering and tourism activity of the railways to the new Corporation so as to professionalize and upgrade these services with public-private participation. While the corporation initially focused on catering and tourism—offering fresh meals on trains and budget travel packages—it launched its flagship online ticket booking service in 2002. This innovation transformed the railway experience, making ticket reservations more convenient for millions of travelers.
Today, IRCTC has expanded its portfolio, offering a variety of services, including travel insurance, train schedules, real-time train tracking, and multi-modal travel options such as bus and air travel. The aim is to become a one-stop solution for customers planning their journeys.
Like any service, IRCTC’s operations have both strengths and areas for improvement. While it has significantly enhanced the convenience of travel for millions, passengers have raised concerns and complaints regarding certain aspects of its functioning.
The ‘No-Service’ Charge
When booking train tickets, it is common for tickets to initially be placed on a waitlist rather than receiving immediate confirmation. Often, such tickets may not get confirmed, resulting in automatic cancellation. For these scenarios, the IRCTC Refund Rules, effective from November 12, 2015, outline the process and charges applicable to waitlisted e-tickets.
“In case of wait-listed e-tickets on which of all the passengers is on waiting list even after preparation of reservation chart, names of all such passengers booked on that Passenger Name Record (PNR) shall be dropped from the reservation chart and refund of fare shall be credited to the account from which booking transaction took place after deducting clerkage.”
These clerkage charges as per the same document are as follows:
“Levy of clerkage per passenger for cancellation of unreserved, RAC and waitlisted tickets:-
- Unreserved (second class): Rs. 30.
- Second class (reserved) and other classes: Rs. 60”
On top of these charges, GST becomes applicable since a service charge is being levied. These GST charges are 5% of the charges levied.
Passenger Concerns
Passengers frequently express dissatisfaction with the automatic cancellation charges on waitlisted tickets. The primary concern is that these charges, deducted despite passengers not availing of any services, feel unjustified.
Responding to these concerns, Railway Minister (RM) Ashwani Vaishnaw stated:
“Clerkage charge is levied on cancellation of all waitlisted tickets, including cancelled, through the IRCTC website as per Railway Passengers (Cancellation of Tickets and Refund of Fare) Rules 2015 and revenue generated from all sources, including cancellation, is utilised for working expenses relating to maintenance and operations.”
However, the doubling of cancellation charges under the revised refund rules has amplified passenger grievances, especially when no tangible service is provided.
A Way Forward: Addressing Public Concerns
Consumers are currently bearing charges that many consider unjust, as they are paying without receiving any tangible goods or services in return. For passengers with waitlisted tickets, who do not ultimately avail of travel services, these charges become an unnecessary financial burden.
Comparative Perspectives on Waitlist Management
When compared to Indian Railways (IR), many countries focus on minimizing the need for a waitlist system by implementing proactive measures to manage passenger demand and capacity. The following approaches are commonly employed:
- Standing Tickets
- Some countries allow passengers to purchase standing tickets for certain non-high-speed trains, enabling them to board even without a reserved seat.
- Indian Railways has long utilized a similar concept with its General (Unreserved) Coaches, catering to passengers who do not require reserved seating.
- Alternate Routes or Trains
- In other railway systems, passengers are encouraged to book tickets on alternative routes or less popular trains when their preferred options are fully booked.
- Indian Railways has adopted a comparable solution through its VIKALP Scheme, which allows passengers with waitlisted tickets to shift to alternate trains on the same route.
- Dynamic Pricing
- Dynamic pricing is used in several countries to manage demand effectively. By adjusting ticket prices during peak and off-peak times, railways can encourage passengers to travel during less busy hours, thereby evenly distributing traffic throughout the day.
- IR has adopted dynamic fares for newly inaugurated high-speed Vande Bharat trains.
In countries where waitlist systems are still in use, they tend to be more structured and passenger-friendly. One notable difference is that waitlisted passengers are typically not required to pay in advance. Instead, payment is made only upon ticket confirmation, reducing the financial burden for passengers whose tickets remain unconfirmed.
However, while these systems may work effectively in their respective contexts, applying a similar solution to Indian Railways requires careful consideration and reform. The unique scale and complexity of IR demand customized approaches to ensure both operational efficiency, passenger satisfaction, and revenue generation.
VIKALP and Auto-Upgradation Schemes
Indian Railways occasionally provides options such as the VIKALP scheme or auto-upgradation, which could be a factor in the charges levied. As highlighted by the RM:
“Further, waitlisted ticket passengers also have the option to get upgraded under the upgradation scheme or shifted to an alternate train under the VIKALP scheme.”
However, in such cases, the financial burden should not fall on passengers who ultimately do not board the train. To ensure fairness, ticket holders who benefit from the VIKALP or upgradation schemes could be charged an additional nominal fee, equivalent to the clerkage charges or a similar amount, rather than passing these costs onto passengers with unconfirmed tickets.
Alternative Approaches for IR
A more equitable approach to address operational and maintenance costs could involve restructuring the fee distribution model. For example, similar to how platforms like Swiggy or Zomato improved their profitability through minor adjustments, IRCTC could introduce a nominal surcharge on confirmed tickets. This carefully calculated adjustment would help offset expenses without unfairly burdening passengers with unconfirmed tickets.
Another improvement could involve implementing a nominal registration fee for passengers joining the waitlist. The full ticket fare would only be charged upon confirmation, while those whose tickets remain unconfirmed would receive a complete refund, including the registration fee.
By combining these measures—restructuring operational fees and introducing a waitlist registration model—the system could ensure fairness for passengers while maintaining overall revenue levels. This balanced approach would address passenger concerns and enhance IRCTC’s operational efficiency.
Conclusion
IRCTC has undeniably transformed the travel experience for millions of passengers by streamlining ticketing, catering, and tourism services. However, the contentious issue of charges for unconfirmed tickets highlights the need for reforms to ensure fairness and transparency. By adopting innovative approaches like dynamic pricing, nominal registration fees for waitlists, and restructuring operational costs, Indian Railways can address passenger concerns while maintaining revenue stability. Moving forward, balancing operational efficiency with customer satisfaction should remain a priority for IRCTC and Indian Railways.
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