Indian Railway — rac tickets

Address:

Mumbai City, Maharashtra, 400097

I don't understand the concept of rac tickets? Why do indian railway keeps rac seats? Even after paying the ticket fare we have to share the seats.
This is pathetic, i think this rac concept should be stopped.
If there is 1 seat and 2 people in waiting either you people charge half amount of the ticket fare or else just give the seat to single passanger.