Railways to hike passenger fares from Friday; eyes Rs 600 cr revenue in coming months

The Indian Railways will hike passenger fares from Friday (December 26). This is the second fare hike within this financial year. An official statement said the fare of air conditioned (AC) and non-AC class tickets in mail or express (long distance) trains will rise by 2 paise per kilometre (km). Fares of ordinary (also called general) class will rise by 1 paisa per km for distances beyond 215 km. There has been no increase in fare of suburban trains and monthly season tickets.

Despite the hike, roughly half the passenger fare across classes continues to be subsidised. For reference, the fare for a 3AC ticket from Delhi to Howrah is around Rs 1.15 per km right now.

The national transporter expects to earn about Rs 600 crore additional passenger revenue in the remainder of this fiscal with the latest revision. Budget 2025-26 estimates Rs 92,800 crore from earning from passenger fares in the current fiscal, up from Rs 80,000 crore in the previous year.


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“For a 500 km journey in non-AC coaches, passengers will have to pay only 10 rupees extra,” the statement said, adding the Railways has expanded its network and operations significantly over the last decade. This has been aimed at catering to a higher level of operations and to improve safety.

According to official estimates, Indian Railways manpower cost has increased to Rs 1,15,000 crore in 2024-25 while the pension bill has increased to Rs 60,000 crore. The total cost of operations also increased to Rs 2,63,000 crore.

Indian Railways budgeted Rs 1.28 lakh crore as staff cost for 2025-26. Another Rs 68,602.69 crore will be appropriated to the pension fund in FY26.

“To meet this higher cost of manpower, railways are focusing on higher cargo loading and a small amount of passenger fare rationalisation,” the statement said, noting India has already become the second largest cargo carrying railway in the world.

Besides higher existing expenses, the Indian Railways is also said to be expecting a higher wage outgo with the implementation of Eighth Pay Commission recommendations. The Seventh Pay Commission recommendations led to an increase of 14-26% in Railways’ wage bill. Seventh Pay Commission recommendations came into effect from 2016, and its decade-long tenure ends in January 2026.

Officials say the Railways is focussing on cutting expenses to improve its operating performance over the next two years so that the hit from the award does not derail its finances. While the seventh pay commission added an additional Rs 22,000 crore to its wage bill including salaries and pensions, the expectation is that it could amount to as much as Rs 30,000 crore this time.

For fiscal 2025-26, the Railways is targeting a 98.43% OR with Rs 3041.31 crore net revenue. Railways OR in 2016-17, when the seventh pay commission was implemented, was better at 96.50%, implying net revenue of Rs 4,913 crore.

Rail fares were last hiked from July 1 this year, raising second-class travel costs by half a paisa per kilometre beyond 500 km. A 1 paisa per km increase for mail express and 2 paisa per km for air conditioned (AC) classes was also announced. Suburban fares or monthly season tickets were kept unchanged.

The fare revision also applies to premier and special train services such as Rajdhani, Shatabdi, Duronto, Vande Bharat, Tejas, Humsafar, Amrit Bharat, Mahamana, Gatimaan, Antyodaya, Jan Shatabdi, Yuva Express, AC Vistadome coaches, Anubhuti coaches, and Ordinary non-suburban services, in accordance with the revised class-wise fare structure.