Indian Railways Passenger Fare Rationalisation: Balancing Affordability and Sustainability
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Ministry of Railways
The Ministry of Railways has rationalised its passenger fare structure effective from 26 December 2025, aiming to balance passenger affordability with the financial sustainability of operations.
Protected Categories: Fares for suburban services and Season Tickets remain unchanged to protect daily commuters. Similarly, no increase applies to Second Class Ordinary journeys up to 215 km.
Graded Non-AC Increases: For Second Class Ordinary journeys beyond 215 km, fares increase by ₹5 to ₹20 based on distance slabs. Sleeper and First Class Ordinary fares increase uniformly by 1 paise per km.
Mail/Express Revisions: Fares for Mail/Express trains, including both AC and Non-AC classes (Sleeper, AC 3-Tier, Vande Bharat, etc.), increase by 2 paise per km.
Unchanged Ancillaries: Reservation fees, superfast charges, and GST applicability remain unchanged.
Implementation: Revised fares apply only to tickets booked from 26 December; existing bookings for future travel will not attract additional charges.
What is Fare Rationalisation in the context of Indian Railways? It is a strategic policy intervention to adjust the basic passenger fare structure in a calibrated manner, ensuring that the increases are minimal and tied to distance. By exempting short-distance commuters and season ticket holders, the policy ensures social equity while generating incremental revenue to support the modernization of safety systems and passenger amenities across the network.
Policy Relevance
This rationalisation is critical for the long-term fiscal health of Indian Railways, which has traditionally subsidized passenger fares through freight revenue. By implementing a marginal increase (e.g., ₹10 extra for a 500 km Mail/Express journey), the government is moving toward a more sustainable operating ratio without placing an undue burden on low-income travelers. The policy specifically insulates the “bottom of the pyramid” by maintaining current rates for suburban and short-distance ordinary travel, which account for the highest volume of passengers.
Relevant Question for Policy Stakeholders: How will the incremental revenue from this calibrated fare increase be specifically earmarked for the accelerated deployment of safety technologies like ‘KAVACH’ across the high-density rail corridors?
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