The Ministry of Railways has announced a marginal increase in passenger fares effective from 26 December 2025. Fares for AC classes and non-AC Mail and Express trains will rise by 2 paise per kilometre.

Short-distance travellers in ordinary class up to 215 km and suburban commuters remain exempted to protect the economically weaker sections. The move aims to offset soaring operational costs, including a ₹1.15 lakh crore manpower bill and ₹60,000 crore in pension liabilities.

This marks the second fare rationalisation of the current financial year following a revision in July. Officials expect to generate approximately ₹600 crore in additional revenue from this adjustment.

Micro-Hike Target

Over the last decade, Indian Railways has undergone a massive transformation, shifting towards high-speed corridors and advanced safety protocols. However, maintaining this sprawling infrastructure requires immense capital.

With the total cost of operations hitting ₹2.63 lakh crore for 2024–25, the ministry is walking a tightrope. By implementing a “micro-hike” that targets long-distance and premium travel, the government is attempting to generate essential revenue without triggering widespread public backlash or crippling the budgets of daily wage earners.

Detailed Fare Breakdown

The specifics of the hike are calculated to be minimal on a per-passenger basis. For instance, a 500 km journey in a non-AC coach will cost a mere ₹10 extra. For ordinary class journeys beyond 215 km, the hike is capped at 1 paisa per kilometre.

“The focus is on safety and improving passenger experience through better manpower and faster trains,” a senior railway official told TOI.

Currently, the railway’s manpower costs have reached a staggering ₹1.15 lakh crore. While the July revision brought in ₹700 crore, this December update is projected to add another ₹600 crore to the coffers, primarily funded by non-suburban and long-distance travel.

Railways Still Affordable?

Beyond passenger fares, the Indian Railways is pivoting heavily towards its freight business to sustain its financial health. The ministry is prioritising higher cargo loading volumes, with India now recognised as the second-largest cargo-carrying railway globally.

By shifting the financial burden away from suburban services and Monthly Season Tickets (MSTs), the railways ensures that the “lifeline of the nation” remains affordable for the masses.

Officials have clarified that this fare rationalisation is “limited and calibrated,” designed to fund the rising manpower requirements needed to operate an increasingly complex and high-tech network while keeping basic transport accessible to all.

Smart Saving Tips for Passengers

Here are a few saving tips to make your journeys budget friendly:

• Book 60 Days in Advance: Take advantage of the Advance Reservation Period (ARP). Booking early not only ensures a confirmed berth but also helps you avoid the high premiums of Tatkal or Premium Tatkal tickets, which can cost significantly more.
• Use IRCTC Co-branded Cards: Consider using the IRCTC SBI Platinum Card or similar bank tie-ups. These cards offer up to 10% value back as reward points on AC ticket bookings, effectively negating the impact of small fare hikes.
• The “Alternative Trains” Search: Use apps like ConfirmTkt or Where Is My Train to find alternative trains on the same route. Sometimes, a slightly longer route on a Superfast Express is cheaper than a shorter route on a premium train like Rajdhani.
• Check the ‘VIKALP’ Scheme: When booking a waitlisted ticket, always opt for the VIKALP scheme. This allows the system to provide you with a confirmed seat in an alternative train on the same route at no extra cost, even if the alternative train has a higher fare.
• Opt for Lower Berths for Seniors: Ensure you correctly fill in age details for senior citizens. While concessions have changed, the system still prioritises lower berths for seniors, making the journey more comfortable and “value-packed.”
• Avoid Peak Season Surcharges: If your travel dates are flexible, avoid travelling during the peak “Suvidha Train” periods or festival rushes when dynamic pricing kicks in, often doubling the base fare.

The Logical Indian’s Perspective

At The Logical Indian, we acknowledge that maintaining a safe and efficient rail network requires substantial funding, yet we believe the burden of inflation should be shared fairly.

While a 2-paise hike seems negligible, it is the frequency of these “rationalisations” twice in one year, that concerns the common citizen. We advocate for a transparent roadmap where fare hikes are directly linked to visible improvements in coach hygiene, food quality, and punctuality.