Why Indian Railways Fares Are Set to Rise After 5 Years – Who’s Affected and Who’s Not
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After a five-year gap, Indian Railways is set to implement a modest fare hike starting July 1, 2025. This revision, focused primarily on long-distance travel, aims to boost revenue while keeping everyday travel affordable for millions.
What’s Changing and Who Will Be Affected?
Beginning next month, passengers travelling in AC, Sleeper, and Second Class coaches will see a small rise in ticket prices:
This is the first revision since 2020 and, according to officials, the most minimal fare hike ever introduced.
Who’s Not Affected?
If you use local trains for daily travel, breathe easy. Suburban train users and monthly season pass holders will see no change in fares. The Railways has kept affordability intact for the vast majority who rely on daily commuting.
Why Now?
The fare hike is in response to a December 2024 recommendation by the Standing Committee on Railways. The Committee pointed out the urgent need to align passenger fares - particularly for AC classes - with the actual cost of operation.
This imbalance has put pressure on the Railways, which continues to subsidise passenger services heavily despite rising costs.
Revenue Goals and Long-Term Impact
Passenger traffic currently contributes around 30% of Indian Railways’ total income. The Railways has projected passenger earnings of Rs 92,800 crore in FY2025-26. The modest fare hike is expected to add another Rs 700 crore during the remainder of the financial year.
While the hike may slightly impact travellers’ wallets, it's seen as a crucial step toward reducing long-term financial losses and ensuring better infrastructure and services.
The fare hike may slightly impact your pocket, but it’s a carefully measured move. With daily commuters spared and only a minor increase for long-distance travellers, Indian Railways aims to strengthen its backbone without derailing accessibility.
What’s Changing and Who Will Be Affected?
Beginning next month, passengers travelling in AC, Sleeper, and Second Class coaches will see a small rise in ticket prices:
- AC classes: Hike of 2 paise per kilometre
- Sleeper class: Hike of 1 paise per kilometre
- Second class (General): Hike of 0.5 paise per kilometre, but only for journeys over 500 km
This is the first revision since 2020 and, according to officials, the most minimal fare hike ever introduced.
Who’s Not Affected?
If you use local trains for daily travel, breathe easy. Suburban train users and monthly season pass holders will see no change in fares. The Railways has kept affordability intact for the vast majority who rely on daily commuting.
Why Now?
The fare hike is in response to a December 2024 recommendation by the Standing Committee on Railways. The Committee pointed out the urgent need to align passenger fares - particularly for AC classes - with the actual cost of operation.
- Some important figures behind the move:
- Suburban trains recover just 30% of operational costs
- Non-AC long-distance travel covers 39%
- AC travel yields a mere 3.5% surplus
This imbalance has put pressure on the Railways, which continues to subsidise passenger services heavily despite rising costs.
Revenue Goals and Long-Term Impact
Passenger traffic currently contributes around 30% of Indian Railways’ total income. The Railways has projected passenger earnings of Rs 92,800 crore in FY2025-26. The modest fare hike is expected to add another Rs 700 crore during the remainder of the financial year.
While the hike may slightly impact travellers’ wallets, it's seen as a crucial step toward reducing long-term financial losses and ensuring better infrastructure and services.
The fare hike may slightly impact your pocket, but it’s a carefully measured move. With daily commuters spared and only a minor increase for long-distance travellers, Indian Railways aims to strengthen its backbone without derailing accessibility.
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