**Executive Summary**
This document addresses unstarred question number 1988 in Lok Sabha regarding the criteria for revision of passenger fares in Indian Railways. It outlines the factors considered for fare revisions, including operational costs, fuel prices, inflation, passenger demand, service quality, and affordability. It also provides details on the recent fare rationalizations implemented and the measures taken to protect low-income passengers. The response was provided by the Minister of Railways, Information & Broadcasting, and Electronics & Information Technology. The question was to be answered on 11.02.2026.
**Key Points / Main Content**
* **General Fare Policy:**
* Indian Railways aims to provide affordable transportation.
* Fares are fixed considering the cost of service, value, affordability, and competition, as well as socioeconomic factors.
* Fare policies are influenced by the type of services/facilities provided.
* **Fare Revision Process:**
* Evaluation of passenger fare rationalization is a continuous process.
* Feedback is gathered through various forums, including passenger associations and consultative committees.
* **Fare Rationalization (2025-26):**
* Indian Railways has undertaken two rationalizations of passenger fares during the financial year 2025-26 after a gap of 5 years, implemented uniformly and in a calibrated manner.
* *First Rationalization:* Implemented from 01.07.2025
* No increase in fare of Second Class Ordinary up to 500 km and thereafter increase of half paisa per passenger per kilometer (PKM).
* Marginal increase in fares of Ordinary (Sleeper Class and First-Class) by half paisa per PKM, in Mail Express Non-AC Classes by one paisa per PKM and in AC Classes by 02 paisa per PKM.
* *Second Rationalization:* Implemented with effect from 26.12.2025.
* No increase in fares of Second Class Ordinary up to 215 km and thereafter increase of one paisa per PKM.
* Marginal increase in fares in Ordinary (Sleeper Class and First-Class) by one paisa per PKM and in Mail Express Non-AC Class & AC Classes by two paisa per PKM.
* **Impact on Passengers:**
* The increase in fares has been low, ranging from half paise per km to two paise per km of travel.
* No increase in fare in the last ten years for Suburban service and season ticket holders.
* Less than half the trips will have a marginal increase in fare.
* **Subsidies:**
* The total amount of subsidy given in FY 2023-24 on passenger travel is provisionally estimated at ₹60,466 Crore (45% subsidy).
* Concessions are also given to Divyangjans, 11 categories of Patients and 8 categories of Students.
**Impact Analysis**
**Passengers**
*Impact:* Passengers are affected by fare revisions, with a focus on maintaining affordability. Low and middle-income passengers are specifically considered.
*Action Required:* Passengers should be aware of the revised fare structure based on the distance traveled and the class of travel.
**Government of India / Ministry of Railways**
*Impact:* The Ministry is responsible for setting and implementing fare policies that balance revenue generation with affordability and accessibility.
*Action Required:* The Ministry should continue to monitor the impact of fare revisions and adjust policies as needed to address affordability concerns and ensure financial sustainability.
Key Entities Referenced
Indian Railways: The primary subject concerning revision of passenger fares.
Ministry of Railways: The ministry responsible for the administration of Indian Railways and answering the parliamentary question.
GOVERNMENT OF INDIA
MINISTRY OF RAILWAYS
LOK SABHA
UNSTARRED QUESTION NO. 1988
TO BE ANSWERED ON 11.02.2026
CRITERIA FOR REVISION OF PASSENGER FARES
1988. MS SAYANI GHOSH:
Will the Minister of RAILWAYS be pleased to state:
(a) the criteria and methodology adopted by Indian Railways while deciding
to increase passenger fares, including the parameters used to assess
the need for fare revision;
(b) whether factors such as operational costs, fuel prices, inflation,
passenger demand, service quality and affordability are considered
while proposing fare hikes and if so, the details thereof;
(c) whether any committee, expert body or internal review mechanism
exists to examine and recommend changes in railway fares and if so,
the details thereof;
(d) whether any consultation with passengers, stakeholders or consumer
bodies is undertaken before revising fares and if so, the details thereof;
(e) the details of the frequency and extent of fare revisions undertaken
since 2014, category- wise; and
(f) the details of the steps taken to ensure that fare increases do not
disproportionately burden low-income and daily passengers?
ANSWER
MINISTER OF RAILWAYS, INFORMATION & BROADCASTING AND
ELECTRONICS & INFORMATION TECHNOLOGY
(SHRI ASHWINI VAISHNAW)
(a) to (f) Indian Railways provides affordable transportation service to
more than 720 crore passengers. The fares of Indian Railways are among
the lowest in the world, even when compared with the neighbouring
countries.
Indian Railway fixes the fares with due consideration of the cost of
service, value of service, affordability, competition from other competing
§modes, socio-economic considerations etc. Fares of different train services
are determined also by the type of services/facilities offered.
Evaluation of various alternatives for rationalization of passenger fare is a
continuous and ongoing process. Feedback regarding various passenger
related policies including passenger fare are being received continuously
through various forums such as passenger associations, consultative
committees at station, division, zonal levels etc.
Indian Railways has undertaken two rationalizations of passenger fares
during the financial year 2025–26 after a gap of 5 years. These revisions
have been carried out uniformly and in a calibrated manner across
applicable classes. The first rationalization was implemented with effect
from 01.07.2025, in which there was no increase in fare of Second Class
Ordinary up to 500 km and thereafter increase of half paisa per passenger
per kilometer (PKM). There was a marginal increase in fares of Ordinary
(Sleeper Class and First-Class) by half paisa per PKM, in Mail Express Non-
AC Classes by one paisa per PKM and in AC Classes by 02 paisa per PKM.
The second rationalisation was implemented with effect from 26.12.2025,
in which there was no increase in fares of Second Class Ordinary up to 215
km and thereafter increase of one paisa per PKM. There was a marginal
increase in fares in Ordinary (Sleeper Class and First-Class) by one paisa
per PKM and in Mail Express Non-AC Class & AC Classes by two paisa per
PKM.
The increase in fares has been low, ranging from half paise per km to two
paise per km of travel. Keeping the affordability concerns of low and
middle income passengers, there has been no increase in fare in the last
ten years for Suburban service and season ticket holders. It is estimated
that less than half the trips will have a marginal increase in fare.
The total amount of subsidy given in FY 2023-24 on passenger travel is
provisionally estimated at ₹60,466 Crore. This amounts to a 45% subsidy
on the cost of passenger travel. In other words, if the cost of providing
services is ₹100 then the price of ticket is ₹55 only. Besides this subsidy
which is common to all passengers, concessions are also given to
Divyangjans, 11 categories of Patients and 8 categories of Students.
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