Railways Likely To Hike Fare From July For Long-Distance AC, Sleeper, Second Class Passengers: Report

The Ministry of Railways is likely to implement a fare hike from 1 July 2025, for AC classes, Sleeper Class, and Second Class (General) passengers, aiming to enhance passenger revenue, The Indian Express reported, citing sources.

Suburban fares and monthly season tickets will remain unaffected.

The matter is under consideration at the higher level and a notification may be issued by the government soon, according to a source site

The proposed increase includes 2 paise/km for AC classes, 1 paise/km for Sleeper Class, and 0.5 paise/km for Second Class, applicable for journeys above 500 km.

The hike is expected to generate approximately Rs 700 crore in additional revenue for the remaining months of FY 2025–26.

According to the Railways, the total projected passenger revenue for FY26 is pegged at Rs 92,800 crore, up from Rs 75,215 crore in FY25.

Data from Indian Railways shows AC 3-tier will contribute the highest additional earnings (Rs 533.8 crore), followed by Sleeper Class (Rs 292.3 crore) and AC 2-tier (Rs 93.1 crore). The total projected additional revenue from all classes is estimated at Rs 989.9 crore.

Though AC classes account for only 4.8 per cent of total passengers, they contribute 54 per cent of passenger revenue.

This significant disparity highlights the premium nature of AC services and their appeal among travelers willing to pay for added comfort.

Consequently, Indian Railways continues to focus on enhancing the quality and availability of these services to maximise revenue potential in the coming years.

By contrast, sleeper and general classes carry 37 per cent  of passengers, and suburban trains serve 57 per cent .

The last fare revision took place in January 2020, with modest increases across AC and non-AC categories.

A parliamentary standing committee in December 2024 had recommended aligning AC fares with operational costs, citing low cost recovery and urging a review to reduce losses in the passenger segment.