To promote its revenue from the passenger segment, the Ministry of Railways is likely to increase fares for AC classes, sleeper class and second class. There is no increase in suburban fares and monthly season tickets, it is learned.
Sources said that the new rates will be effective from July 1. “The matter is under consideration at a high level and a notification may be issued by the government soon. For AC classes, two km per km per km, non-AC (mail/express) may increase per km per km per km per km, which is the sleeper square, and more than 500 km per km per km per km per km per km for the distance of more than 500 km.
Passenger will generate an additional revenue of about `700 crores for the remaining period of the current financial year 2025-26, which starts from the railway launch of the kilometer (PKM) railway launch. For a full fY26, the additional revenue generated would have been more than `920 crores.
According to the Railways, the total estimated revenue from the passenger segment is `92,800 crore from the passenger segment for FY26 on the expectation of increase in passenger number. In FY25, when traveled by more than 736 crore trains, the total passenger revenue was `75,215 crore.
Railways produces about 65% of their total revenue from transportation of goods. The passenger section contributes about 30%, and the rest is from diverse sources.
In the passenger segment, premium AC classes-like AC First Class, AC 2-Tier, AC 3-Tier and AC Chair-Kar-Kul passengers contribute about 54% of car-kul passengers. But in terms of the number of passengers, the AC classes are only 4.8% of the total, while sleeper and general classes are about 37 percent simultaneously. Suburban trains are responsible for 57% of passengers.
The final amendment to passenger fares was in January 2020, when the ministry increased the fare of the non-AC class (mail/ express), also known as a sleeper class, by two Paisa per km and four by AC classes by four paisa per km. There was no increase in suburban fare up to 80 km or season tickets.
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In May 2022, the suburban section fare was further rational, when the single travel basic fare of AC EMU (a type of train used in suburban railway networks like air -conditioned electric multiple unit, Mumbai) was reduced by 50%. First class single travel basic fare was also deducted by 41-49%.
In December 2024, the Standing Committee on Railways recommended the Indian Railways to review revenue from AC classes and aligned it with aligning costs to reduce the loss in the overall passenger segment.
Railway passenger is giving heavy subsidy to services. According to a report by the Parliamentary Committee, suburban services cost about 30%and non-AC travel 39%, while the AC journey produces a marginal surplus of only 3.5%.
“The committee feels that this is the major significance to increase the net revenue of Indian Railways, to increase its earnings from the passenger segment. The committee knows that Indian Railways are the main means of transport for crores of people and they have to bear the loss for pricing for social service obligations. Classes aligning it with costs to reduce losses in the passenger segment,” the committee said.
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