Indian Railways is planning to initiate a marginal hike in passenger fares, July 1 onwards. Amongst the increases, AC fares - across all trains and classes, barring suburban ones - will see a 2 paise per km hike, officials told businessline. This is the first time fare hikes are being initiated since 2020.
Hikes between 0.5 paise and 1 paise per km is being initiated in some other segment too.
The hike, will roughly translate into a ₹10–15 hike in base fares for non-AC train travel per 1000 km; and close to ₹20–30 hike (also in base fares) for AC compartment travel, a second official said.
AC fare hikes are likely to be in all train categories, Rajdhani, Vande Bharat, Shatabdi and others. Incidentally, for the Railways, growth in AC passengers are in the 10- 11 per cent range per year, depending on some 2019–22 calculations; as against non AC segments which have de-grown.
For instance, the per km fare between Delhi and Howrah in a Rajdhani 3AC was to the tune of ₹1.13; and, post July 1, could be in the range of ₹1.15 per km.
Officials clarified that tickets booked before July 1, if the hike is initiated, will continue to be at older price; that is, a traveller need not pay the difference in fares arising between old and new fares during a journey.
“Previously the difference amount used to be charged from passengers; but not any more. It led to confusion and a variety of problems because of which July 1 would be considered as the cut-off date for new fares,” one of the officials said.
In the Budget presented earlier this year, Railways eyed passenger fare revenues to the tune of ₹92,800 crore, up 16 per cent y-o-y, as compared to revised earnings estimate of ₹80,000 crore in FY25. Passenger volumes are expected to grow 9 per cent.
Segment-wise hike
Officials said train fare will rise by 0.5 paisa per km for second class travel beyond 500 km; while the hike will be to the tune of one paisa per km for Mail Express.
There is no increase in suburban fare or in monthly season ticket.
A formal notification from the Railways is awaited.
In FY26, the Railways’ operating ratio is estimated to be 98.43 per cent. This is slightly lower than the revised estimate for operating ratio in 2024-25 (98.9 per cent). Operating Ratio is the ratio of working expenses to the receipts from traffic. A lower ratio implies better profitability and availability of resources for capital spending.
It has been observed, that at present freight services cross-subsidise passenger services.
The NITI Aayog (2023) noted that freight charges were almost three times the passenger charges as of 2018-19. It also observed that during a 10-year-period, 2009-2019, freight rates increased by 91 per cent, whereas passenger fares increased by 28 per cent. Revenue from passenger services across most categories are unable to cover cost. And except AC 3 tier and AC chair car (in some years), all other classes of passenger services have observed losses in all four years between 2018-19 and 2021-22.
The Standing Committee on Railways (2024) recommended a comprehensive review of Railways’ operating expenses for passenger trains, and passenger fares. It recommended rationalising them to reduce losses while also ensuring affordability of prices.
Previous hikes
In 2020, fare hikes were in the range of 4 paise per km for AC categories, 2 paise per km for sleeper class, and one paise per km for ordinary class.
In 2013, hikes were around 10 paise per km for AC chair car and 3 AC categories, 6 paise per km for all other AC categories and around 2 paise per km for sleeper class fares.