Indian Railways has decided to increase passenger train fares again across all classes from 26 December, the second time it is doing so after July this year. The fare hikes, ranging from one to two paise per kilometre, will earn the transporter about ₹600 crore in the remaining period of this fiscal year.
According to the ministry of railways, the second fare rationalization this fiscal would streamline tariff structures and enhance financial sustainability of passenger services.
Indian Railways makes losses on passenger transport across classes that with fares that are about 45% below cost. Freight charges cross subsidize passenger fares.
The revision effective from Friday would see fares for ordinary second class travel (non AC) rising by 1 paisa per km while mail express non-AC class travel are to be revised by 2 paisa per km. AC class fares are also to rise by 2 paisa per km.
However, to provide relief from fare hike for travellers in ordinary trains, Railways had decided there will be no change in fare for second class for travel up to a distance of 215 km. Also, no increase of fare has been made in suburban trains and monthly season tickets.
“Railways has expanded its network and operations significantly over the last decade. To cater to a higher level of operations and to improve safety, it is increasing its manpower. Consequently, manpower cost has increased to ₹115,000 crore. Pension cost has increased to ₹60,000 crore. Total cost of operations has increased to ₹263,000 crore in 2024-25. To meet this higher cost of manpower, railways are focusing on higher cargo loading and a small amount of passenger fare rationalization,” the ministry of railways said in a statement adding the Railways continues to target better efficiency and cost savings.
Although the Railways didn’t specify it, given that the fare revision applies to all passenger trains, it will cover services such as Vande Bharat, Rajdhani, Shatabdi, Duronto, Tejas, Humsafar, Amrit Bharat, Mahamana, Gatimaan, Antyodaya, Jan Shatabdi, Yuva Express, AC Vistadome coaches, Anubhuti coaches, and ordinary non-suburban services.
Bettering the operating ratio
Coming ahead of the FY2027 Union budget, the fare rationalization would help the Railways improve its operating ratio that is projected at 98.43% this fiscal.
Operating ratio represents the ratio of working expenses (such as fuel and salaries) to traffic earnings and is used to measure the operational efficiency of the transport utility.
After improving to 97.45% in 2020-21, Indian Railways’ operating ratio remained elevated at 107.39% in 2021-22, 98.14% in 2022-23, 98.43% in 2023-24, 98.32% (revised estimate) for 2024-25, and 98.43% (budget estimate) for 2025-26.
Consequent to the fare increase, a 500 km journey in non AC coaches will cost ₹10 higher to the passenger. Similarly, a Delhi-Mumbai trip by mail-express AC class, about 1,384 km, will become more expensive by ₹27.68.
The Railways has not revised charges for ancillary services. Reservation fees, superfast surcharges, and other charges remain unchanged while good and services tax will continue to be levied as per applicable rules. It also said that fare rounding principles remain unchanged.
Revised fares will apply to tickets booked on or after 26 December. Tickets issued before this date will remain valid at the existing fare without any fare adjustment.
Railways last raised fares from 1 July, 2025 that raised fares for ordinary second, sleeper (non AC), and first class travel by half paisa a km. That was the first hike since the Covid pandemic when, January 2020, the transporter hiked fares by two paise a km for non-AC and four paise for AC chair car and AC-3 tier categories.