Train Tickets Likely to Get Cheaper Soon

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Railway fares are likely to go down as the government is planning to withdraw the merchant discount rate (MDR) charges. The MDR charges are currently applicable on payments made via debit or credit card for train bookings by Indian Railway Catering and Tourism Corporation (IRCTC). According to a report by Economic Times, the government is still mulling over removing MDR charges and if it is implemented, it would bring down the ticket prices for all its passengers, making the travel cheaper

It has to be noted that the merchant discount rate charges are applicable on bookings done through Indian Railways Catering and Tourism Corporation (IRCTC) website. The report further states that Union Railway Minister Piyush Goyal on Thursday said that he is currently in talks with banks to see what can be done to relieve passengers from the burden of MDRs.

What are MDR charges?

  1. The merchant discount rate (MDR) charges are applicable on payments made via debit or credit card.
  2. The banks charge MDR to the merchant for providing debit and credit card services.
  3. IRCTC passes the merchant discount rate to consumers.
  4. Then, the merchant sets up a service with the bank and charges a predetermined rate on the card transactions.

Prior to demonetisation, Indian Railways used to charge a service charge which was removed post demonetisation. Due to this, there was a sudden spurt in digital transactions. Currently, the only charge that is charged by IRCTC is the merchant discount rate (MDR).

On Thursday, Goyal while speaking at the India Economic Summit of the World Economic Forum (WEF) said that a million jobs can be created in less than 12 months in the railway ecosystem. He said the rail track and safety maintenance programme reinforced by the government would alone create two lakh jobs.  “My own sense is that jobs may not necessarily be directly in the railways, but certainly through engaging people and working in a variety of areas across the ecosystem, not less than a million jobs can be created in less than 12 months, in only railways and the ecosystem around the railways,” the Minister said.


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