Railway Fare Hikes Effective from July 1: 2 Paise per Km for AC, 1 Paise for Non-AC Travel

The Ministry of Railways has declared an increase in the fare of different classes of traveling such as AC, sleeper class and second classes, which has been increased in five years. The fares will start operating on July 1, 2025. Many other classes such as the AC and non-AC should witness 2 paise per kilometre increase in price of AC classes and 1 paise in the case of non-AC travel and suburban and monthly season tickets will not be impacted. The Ministry relies on the increase of prices to earn huge revenue since the rail industry projects that the number of passengers will increase.

Context

• Fare increments by the Ministry of Railways have been effected on July 1 2025, wherein the AC modes of travel are increased at a rate of 2 paise per kilometre and non AC travel is increased by 1 paise per kilometre. 

• The fare adjustment would earn an extra income and be helpful in developing the financial status associated with the railway industry.

Key Points

Information about Fare Hike:

• AC Travel:

  • The AC1, AC2 and AC3 fares will be hiked by 2 paise per km.

• Non-AC Travel:

  • Fares of other sleeper classes, without AC, second class and in mail/express trains will increase by 1 paise every kilometre.

• Fare Rise through Distance:

  • In ranges between 501 km and 1,500 km, there will be an increase of 5 rupees in fares.

  • On the distance 1,501km to 2,500km, the mutual fares will increase by 10 Rs.

  • The fares will increase by 15% in the distance category 2,501 kms to 3,000 kms.

Passenger Revenue and Forecasts:

• AC Classes:

  • AC1: 480 passengers, estimated revenue is 1,527 crores.

  • AC2: 4,657 passengers, estimated income 8,776 crore.

  • AC3: 26,688 passengers, estimated revenue of 11 715 crore.

  • Executive Class : 235 customers, estimated turnover 987 crore.

• Non-AC Classes:

  • AC Chair Car: 2,822 passengers, estimated earnings 5,626 0crore.

  • Sleeper Class: 25,923 people, estimated revenue 11582 crore.

  • Second Class (Mail/Express): 17,511 passengers, estimated income rupees 5,065 crore.

Revenue Impact:

• It is projected that the fare revision will add greatly towards the revenue of Indian Railways as even the increases in the fares by themselves will amount to a 9.6 crore extra income.

• The Railway Ministry has the target of raising the total passenger revenue to 92,800 crore as a result of the improving passenger traffic.

Past Fare Increase:

• The most recent increase was in January 2020, in which there was an increment of 2 paise per kilometre in non-AC mail/express mails/expresses and 4 paise per kilometre in AC mail/express.

Additional Charges:

• The new fare system will not change such ancillary payments as reservations fees and superfast surcharges.

Revenue Generation and Forecasts of finance:

• The Railway Ministry estimates that the financial year (2025-26) revenue collection through fare increments will mean 1,100 crore.

• Hiking of fares will enhance financial sustainability of Indian Railways in the next few years.

Conclusion

Projection is that, the increase of fare by the Ministry of Railways will generate more passenger income thereby boosting the financial growth in the sector. Though there will be no change in the pricing of the suburban and season ticketing fares, increased fares of non-AC and conveyance fares will give the necessary finances to the railway industry in the development and sustainability of the industry.