Finally, some fresh air in the monopolistic world of online railway ticket booking. Last month, the competition watchdog found prima facie that the Indian Railways and its online ticketing subsidiary Indian Railway Catering and Tourism Corporation is abusing its dominant position against the provisions of India’s competition act.
The Competition Commission of India has launched a 60 day investigation into a complaint which alleged that the the IRCTC, which only provides a facility to transact with the Indian Railway’s PRS system through the Internet, is charging a premium on e-tickets (via).
Among other things, it also said that other fees such as the fee an agent has to pay to IRCTC to become one have no economic rationale. The complaint also pointed out how giving preference to development of facilities such as the Internet inside trains is discriminatory.
Let Competition In
This should have been done a long time ago as there is no reason why IRCTC should have a monopoly on online railway ticket booking. You don’t have to look any further than our own telecom sector to know this.
There are similarities between what is happening in the case of IRCTC and what has happened in the telecom sector. Incumbents or monopolies had to slowly give away their control on essential services to competition. As part of the Government’s liberalization agenda, monopolies, also called vertically integrated service providers (because they owned the pipe and the service), were asked to give access to competition in a non discriminatory fashion.
We all know that the sector saw unprecedented boom afterwards.
In sectors that the Government wants to liberalize, for instance, the telecom sector in the 90s, it is natural to unbundle competitive elements from the natural monopoly. This helps bring in private investment and also create competition in the market. Taking into account the inefficiencies in the IRCTC system, it is high time that the government let in competition.
Read the full order here.