Hi All, While a lot is being said on the strides of improvement and profitability the Indian Railways has done, there is one grey area which needs to be closed looked into. During the ticketing proceedure, the railways entertaing booking for passengers even after after all confirmed seats are booked. These are the RAC(reservation against cancellation) and the Waitlisted passengers. On close scrutiny I found that the railways makes a lot more money only on the cancellation charges and these cancellations, hold you breath, are being done by the railways and not by passengers! Here is how.
1) Railways make money by charging cancellation charges for confirmed passengers. Remember, those confirmed seats are at most times filled by the RAC and waitlisted passengers. What is the need for cancellation charges, when you know the seats will be occupied? Even Residential apartment builders return 100% of you apartment booking charges, if the apartment is taken by somebody else(mine did). Only in places where you find it tough to get another customer, do you leavy cancellation charges.
2) This is a big one.Railways also makes money on cancellation charges for people not confirmed on RAC and Waitlisted. As per railways policy, RAC and waitlisted passengers cannot board the train. Hence, they have no option but use other modes of communication. So not only are you inconvenienced, you also need to pay the cancellation charges( Rs 20 per person)! Little wonder the railways makes crores through such methods!