Arbitrage opportunity in Indian railway tickets..

Well, one can only do so much. The Govt recently hiked the price of platform tickets (allows to just enter the railways station, could be to drop or pick someone or any other purpose) from Rs 5 to Rs 10. I mean now we have stopped hiking prices by 1 or 2 Rs. It is straight double which become too much to handle. Why should someone pay that much right away?

Anyways, interestingly there is an arbitrage opportunity. It is not a strictly arbitrage in the finance sense where one can buy cheap and sell expensive without a fuss. Here, one can avoid buying the platform tickets as train tickets are cheaper. The cheapest travel ticket in Hubbali costs Rs 5. So someone can still just pay Rs 5 and get the platform ticket service:

Starting April 1, Rs 10 will get you entry to Hubballi railway station platform, while Rs 5 will take you to Unkal, 20km away. Or Kundgol. Or Kusugal. That’s the minimum fare on an unreserved ticket. People chary of paying up Rs 10 for a few minutes of farewells on the platform, have already found a way to get paisa-wise: buy a general ticket for Rs 5, spend time on the platform with family and walk coolly out of the station – Rs 5 saved. Such shades of Scrooge are apparent among our folk who are looking to take advantage of an option provided, wittingly or otherwise, by the railway ministry itself.

The railway ministry has decided to increase the rate of platform tickets from Rs 5 to Rs 10 from April 1. It has also allowed divisional railway managers to increase the platform ticket rate beyond Rs 10 for occasions like fairs, rallies and festivals, the intention being to control the rush on platforms.

Passengers have been quick to spot the irony of the situation – that the minimum fare for ordinary trains is Rs 5, 50% less than the proposed rate of a platform ticket. They also know that no one can object to them walking on to the platform, armed with a ticket for Rs 5 – it may be unethical but perfectly legal, and probably happens only in India. Receiving family members and saying goodbyes is a deep-rooted Indian travelling tradition which few violate.

A clerk at Hubballi station recalled that this was happening regularly till October 7, 2013, when the minimum journey fare was Rs 3 and the platform ticket rate was Rs 5. “When the minimum fare was raised to Rs 5, on par with a platform ticket, visitors started buying platform tickets. Now it will be back to square one,” he said.  A lady clerk, who worked at Bengaluru City station earlier, said this is common in the metro too. Passengers buy a ticket to Malleswaram, Cantonment or Nayandahalli stations for Rs 3 to evade paying Rs 5 for a platform ticket. “This was the general fare for ordinary trains then,” she recalled.

As unreserved tickets can be bought only an hour before the train arrives, passengers have found a way out of such tight situations too: they buy tickets for any ordinary train headed in any direction, at any time. Naveen Parapur, a construction worker in Hubballi, recalled that he often bought tickets to Unkal, Kusugal or Kundgol — stations on Hubballi’s outskirts but on different routes – for Rs 3 just to reach the platform. “I will do this now too. I will certainly not buy a platform ticket for Rs 10,” Naveen said.

Mahendra Singhi, member of the Divisional Railway Users’ Consultative Committee, said the ministry’s move lacks practical sense. “The ministry itself is promoting this unethical practice. Seeing off and receiving family is our tradition, the ministry should look on it as a service rather than as a commercial opportunity. It should maintain the same fare for platform tickets or reduce it,” he felt.

It has come to our notice that the minimum journey fare is less than the proposed rate of the platform ticket. As journey tickets are given one hour before the arrival of a particular train, visitors cannot buy such tickets all the time. If they do this to evade buying platform tickets, they cannot be prosecuted according to the existing guidelines.

Fascinating. And we keep thinking poor people are stupid. They are the first to spot such opportunities.

I mean more than just increasing the fare, one should ensure there is regular checking to ensure people buy platform tickets. Most of the time it is not the case. The government is more interested in random surprise checks which only leads to more illegal monies in the pockets of checkers. On being caught, people just pay half the fine as a bribe which is a win -win for both.

A simple check at the entry and exit point will ensure both, more revenues and less traffic on the platforms.

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