Indian Railways To Hike Fare From July 1; Commuters Will Be Charged 2p/Km for AC, 1p/Km for non-AC

The Ministry of Railways has announced a fare increase for AC, sleeper, and second classes, effective from July 1. This marks the first hike in five years. Suburban and monthly seasonal fares remain unchanged. The revised fares will not impact tickets booked before July 1 at the old rates. However, new tickets issued by train staff or at stations from July 1 will reflect the updated prices.

For AC classes, including first class, 2-tier, 3-tier, and chair car, fares have risen by two paisa per kilometre. Non-AC classes in mail and express trains see a one paisa per kilometre increase. A passenger travelling 1,000 km in any AC class will pay an additional Rs 20. Sleeper or general coach passengers on Mail or Express trains will incur an extra Rs 10.

Fare Adjustments for Ordinary Trains

In ordinary trains' second or general class, there is no fare change for distances up to 500 km. Beyond that, the fare increases by Rs 5 for distances between 501 km to 1,500 km, Rs 10 for distances between 1,501 km and 2,500 km, and Rs 15 for distances between 2,501 km to 3,000 km.

The Railways projects that this fare hike could generate over Rs 1,100 crore in additional revenue for the remaining period of the current financial year (2025-26). If applied throughout the entire financial year, the increase would have generated over Rs 1,450 crore.

Revenue Projections and Passenger Contributions

The Railways expects total passenger segment revenue for FY26 to reach Rs 92,800 crore due to anticipated passenger growth. In FY25, with over 736 crore passengers travelling by train, total passenger revenue was Rs 75,215 crore.

Passenger services are heavily subsidised by the Railways. A Parliamentary committee report shows suburban services recover about 30% of their costs while non-AC services recover around 39%. AC travel generates a slight surplus of approximately 3.5%.

Revenue Sources and Class Contributions

Freight transportation accounts for nearly 65% of total Railway revenue. The passenger segment contributes almost 30%, with premium AC Classes - such as AC First Class and AC Chair Car - contributing about 54% of total passenger revenues despite only representing about 4.8% of passengers.