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The Indian Railways is contemplating a slight increase in train ticket prices, effective July 1st. This potential fare adjustment is intended to address the ongoing challenges of financial sustainability within the railway system. The proposed hike involves a one paisa per kilometer increase for non-AC Mail and Express trains and a two paise per kilometer increase for air-conditioned coaches. Notably, there will be no change in fare for suburban tickets, monthly season tickets, or ordinary second-class tickets for journeys up to 500 kilometers. However, a slight increase of half a paisa per kilometer is being considered for journeys exceeding 500 kilometers in ordinary second class. According to official sources, the primary rationale behind this fare rationalization is to generate additional revenue for the Indian Railways, which has been facing financial pressures despite a high volume of passenger traffic. The Ministry of Railways reports that 715 crore passengers traveled by Indian Railways between April 2024 and March 2025, generating ₹75,750 crore in passenger revenue. The proposed increase follows a five-year period without any changes in fares. Former Member (Traffic) of the Railway Board, M. Jamshed, characterizes the proposed one to two paise per kilometer increase as a long overdue rationalization. He estimates that this could potentially contribute an additional ₹1,500 crore to ₹1,600 crore to passenger revenues. Similar fare hikes were implemented in 2013, 2014, and 2020. The need for this hike stems from the increasing operational costs and the need to maintain and upgrade the extensive railway infrastructure. Without adequate revenue generation, the Indian Railways faces challenges in meeting its financial obligations and investing in modernization projects.
Despite the anticipated increase in passenger revenue, financial sustainability remains a significant challenge for the Indian Railways. The total earnings for FY2024-25 fell short of budgetary estimates. While passenger revenue increased to ₹75,457 crore, it remained below the budgeted figure of ₹80,000 crore. Furthermore, despite an incremental freight loading of 26 million tons, the revenue generation from freight services was marginal. The Indian Railways faces ambitious targets for FY2025-26, with a passenger revenue target of ₹92,000 crore, which Mr. Jamshed believes are unlikely to be achieved under the current circumstances. He suggests that a combination of aggressive marketing of freight services and a fare hike to reach a level of break-even within the next five years could be a viable survival strategy for the Indian Railways. The challenge is to balance the need for increased revenue with the affordability of train travel for the general public. The Indian Railways plays a crucial role in the transportation infrastructure of India, serving millions of passengers daily. Ensuring its financial stability is paramount to maintaining its operational efficiency and facilitating economic growth. The proposed fare hike is a step towards addressing these financial concerns, but it also necessitates a focus on improving passenger services and operational efficiency.
A former railway official noted that, from an individual passenger’s perspective, the proposed hike appears nominal. For example, the 2AC fare from Delhi to Mumbai on the Mumbai-Central Tejas Rajdhani, currently priced at ₹4,245, will increase by approximately ₹27. While the increase may seem insignificant on an individual basis, it contributes to the overall revenue generation for the Indian Railways. The official also emphasized that alongside the fare hike, there should be a corresponding focus on improving the quality of services provided to passengers. This includes ensuring clean toilets, providing quality meals, and enhancing the overall travel experience. The success of this fare hike hinges on its ability to generate additional revenue without significantly impacting passenger affordability and satisfaction. The Indian Railways must also focus on optimizing its operations, reducing costs, and exploring alternative revenue streams to ensure its long-term financial sustainability. The proposed fare hike is a complex issue with far-reaching implications for the Indian Railways and its millions of passengers. A balanced approach is needed to ensure that the railway system remains a viable and affordable mode of transportation for all.
Source: Indian Railways considers marginal hike in train tickets from July 1