Indian Railways has hiked passenger fares for the second time in FY26, as the Ministry of Railways looks to strengthen its revenue base while keeping the impact on travellers limited. Officials termed the move “modest and calibrated”, aimed at addressing rising costs without significantly burdening passengers.
The latest fare revision is expected to generate additional revenue of around ₹600 crore during FY26, the ministry said. Based on current passenger volumes, the annualised revenue impact could have reached nearly ₹2,400 crore, indicating the scale of earnings potential from incremental fare adjustments.
Fare Hike Effective December 26
The revised fares will come into effect from December 26. As per the notification, air-conditioned class fares will increase by 2 paise per kilometre, while non-air-conditioned travel on mail and express trains will also see a hike of 2 paise per kilometre. Suburban services and select passenger categories have been kept outside the scope of the increase, ensuring limited impact on daily commuters.
Second Increase in FY26
This marks the second passenger fare hike in the current financial year, signalling a gradual shift in the Railways’ pricing strategy. The national transporter has been grappling with higher expenditure on fuel, staff costs, maintenance, and large-scale infrastructure upgrades, including station redevelopment and network modernisation.
Rather than implementing sharp fare increases, Indian Railways has opted for small, phased revisions to improve revenue realisation while maintaining affordability. Passenger fares in India continue to remain among the lowest globally, especially when compared with rail tariffs in developed economies.
Revenue to Support Modernisation and Safety
Officials said the additional revenue from the fare hike will be channelled towards improving safety, upgrading rolling stock, and enhancing passenger amenities. Investments in signalling systems, track renewal, and station infrastructure remain key priorities.
While freight operations continue to be the Railways’ primary revenue driver, the latest move highlights a growing focus on financial sustainability of passenger services. The measured fare increase reflects the government’s attempt to balance fiscal discipline with passenger welfare as Indian Railways undertakes one of the largest transport modernisation efforts in the world.
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