The Ministry of Railways on Friday decided to withdraw the direction under which half the revenue accruing to Indian Railway Catering and Tourism Corporation (IRCTC), through the convenience fee on train tickets, would have gone to the railway ministry.
“Ministry of Railways has decided to withdraw the decision on IRCTC convenience fee,” DIPAM Secretary Tuhin Kanta Pandey told Business Standard.
Sources said that a board meeting of the IRCTC was called by the CMD to discuss the fee sharing issue at 10 am today.
The board asked DIPAM and concerned departments to intervene in the fee sharing issue with railways.
“The step was taken as the move would have created a big uncertainty for investors of PSU stocks. This, at a time when the centre’s strong steps had created confidence in PSU stocks in the market. Hence, the decision is being reversed,” a government official said.
In order to increase the valuation of PSU stocks, the government has also stopped piece meal sell offs of PSUs that it was earlier doing through ETFs thereby bringing clarity on the disinvestment front. “PSU stocks always had great value, but were lagging behind because of it’s role in managing them,” the official said.
Before 2014, there was no sharing of service charge between IRCTC and the railways though the latter decided the amount of the charge.
Sharing started in 2014 in the ratio of 80:20 between IRCTC and the Indian Railways. The ratio was changed to 50:50 in 2015. However, the charge remained withdrawn for three years from November 2016.