2 Paise per Kilometre Hike in AC Fares
According to the new tariff, there will be no increase for journeys up to 500 kilometres in general second class. For journeys exceeding 500 kilometres, an additional 0.5 paise per kilometre will be charged. Passengers travelling in sleeper class of mail/express trains will have to pay 1 paise more per kilometre. Similarly, those travelling in AC classes will pay 2 paise more per kilometre. However, there will be no increase in fares for suburban trains or monthly season tickets. For example, the distance between Bhopal and Delhi is 700 kilometres. Currently, the AC3 fare is ₹1090. From 1 July, it will increase by approximately ₹14. The sleeper fare from Varanasi to Mumbai will increase from ₹575 to ₹590. The general coach fare from Bhubaneswar to Kanyakumari will increase by ₹11.
Government’s Plans for Additional Revenue
In the 2025-26 budget, the railway estimated revenue based on passenger kilometres and class. The fare increase aims for an annual revenue increase of ₹990 crore, but after three months, this year’s profit will be approximately ₹700 crore. The additional revenue from the fare increase is reportedly intended to reduce railway subsidy deficits and improve services. The railway incurs losses due to subsidies on passenger trains. Railway Minister Ashwini Vaishnaw had stated that the railway spends ₹1.38 per passenger per kilometre but earns only ₹0.71. The Indian Railways’ largest revenue sources are freight and passenger trains, contributing approximately 90% of revenue. The remaining 10% comes from sources such as retiring room rentals, bridge tolls, and land leases. In 2023-24, the railway earned ₹2.56 lakh crore and spent ₹2.52 lakh crore, resulting in earnings exceeding ₹3,000 crore. The 2023 CAG report recorded a loss of ₹68,269 crore in the passenger segment for 2021-22, indicating a continuing deficit in this area.
