5 things you need to know about Indian Railways expected fare hike

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indian railways The Railways has been heavily subsidising passenger services. (Express Archive)

The Ministry of Railways is likely to increase the fares for AC Classes, Sleeper Class and Second Class, in an attempt to boost its revenue from the passenger segment. However, there will be no increase in suburban fares and monthly season tickets, it is learnt.

According to sources, the new rates will come into effect on July 1, 2025. “As compared to the previous fare revisions in 2020 and 2013, the current increase will be the lowest,” a railway official told news agency PTI. “The matter is under consideration at the higher level and a notification may be issued by the government soon,” a source told The Indian Express.

Here are the 5 things you need to know about the latest train fare hike:

01
What has the Ministry of Railways announced for its passengers?
The Ministry of Railways is considering to increase fares of non-AC class in Mail/Express trains and all AC classes from July 1, 2025, according to officials.

“As compared to the previous fare revisions in 2020 and 2013, the current increase will be the lowest,” a railway official told news agency PTI.
02
How much will the Railways charge for each of the train compartments/classes?
The Indian Railways will increase its charges by the following amount(s) for different train compartments/classes:

AC Class: Two paisa per km

Non-AC Sleeper Class (Mail/Express): One paisa per km

Second Class (General Class): Half paisa per km. The increase in charges for this class are valid for passengers travelling distances more than 500 kms.
03
What all remains unchanged?
Keeping in mind the interest of daily commuters, there will be no increase in suburban fares and monthly season tickets.
04
Where does Indian Railways generate its revenue from?
The Indian Railways continue to be the main means of transport for crores of poor people. The Railways has been heavily subsidising passenger services.

The passenger segment contributes almost 30% of Railways' total revenue. According to the Railways, the total projected revenue from the passenger segment for FY26 is Rs 92,800 crore, on the expectations of an increase in passenger numbers.

As per the Railways’ projection of passenger kilometres (PKM), this likely hike starting July would generate an additional revenue of around Rs 700 crore for the remaining period of the current financial year 2025-26.
05
Why is there a sudden fare hike?
In December 2024, the Standing Committee on Railways recommended the Indian Railways review the revenue from the AC Classes and align it with the cost incurred to reduce losses in the overall passenger segment.

According to a parliamentary committee report, the suburban services recover around 30% of costs and non-AC travel 39%, while AC travel generates only a marginal surplus of 3.5%.

As per the Committee, to increase net revenues of Indian Railways, it is of prime importance to increase its earnings from passenger segment. The Committee, at the same time, felt that ‘General class’ travel must remain affordable for the masses.