Nothing good comes for free. That’s the message loud and clear in the various moves the Narendra Modi government is making in infrastructure. Be it rising highway tolls, heavy-duty bridges and tunnels, or now the latest addition—a hike in train fares.
Starting July 1, Indian Railways has increased passenger fares across most long-distance trains: the first such move in five years. But while the hike may pinch slightly on paper, its implications are broader, reflecting a subtle but decisive shift in both public expectations and political risk-taking.
The fare increase is marginal but with a purpose: 2 paise more per km in AC classes and 1 paisa more in the sleeper and second-class Mail and Express trains. For slow passenger trains, the hike is 0.5 paisa per km and applies only on trips exceeding 500 km.
Suburban services and monthly season tickets remain unaffected. The fare for a 1,000 km distance in multi-class passenger trains will be hiked on an average at Rs 10 for economy class and Rs 15 for second class.
Still, it adds up. With over 4.8 trillion passenger km of movement expected in FY2025-26, the fare adjustment is projected to net the railways an additional Rs 1,100 crore over the remaining nine months of the financial year. Had it been implemented from April 1, the amount would have crossed Rs 1,450 crore.
This boost is no small deal in a system where passenger operations are heavily subsidised. Suburban travel recovers barely 30 per cent of its cost; non-AC long-distance journeys about 39 cent. Only AC segments, thanks to their premium pricing, manage a slender surplus of around 3.5 per cent.
But just as telling as the numbers is the silence. There’s been precious little political outrage. No protests. No widespread condemnation. That silence suggests two things: one, that the BJP now believes it can insulate itself from backlash in the wake of such policy decisions, a courage lacking in many predecessors who either delayed fare increases or cloaked them in opaque surcharges.
Two, the Indian passenger appears to have grown up—prepared, albeit grudgingly, to shell out a little more in return for real enhancements of service. Most importantly, there has been radio silence even from railway minister Ashwini Vaishnaw on this on social media.
All of this is a far cry from 2014 when the new Modi government had to roll back a proposed hike in suburban fares following a blowback. In comparison, the latest fare hike comes just months before the crucial Bihar elections.
This could mean that increases in railway fares may finally no longer be the political silver bullet they once were. Some of this change in perception is a consequence of how far Indian Railways has come in recent years. The widening of Vande Bharat routes, the visible station modernisation projects and the cleaner coaches—all of that adds to the fact that the railways is trying to deliver what is more than just status quo.
The fare hike becomes a piece of a larger narrative then: of passengers paying for, and demanding, better value. To be sure, for a few years now, the railways has been printing the not-so-subtle message on all its tickets that it recovers only half of its cost from ticket fares.
The last fare hike was in January 2020. It amounted to an increase of 4 paise per km for AC classes and 2 paise for non-AC and suburban services. The shift was made with relatively little political resistance.
The current fare increase is less steep, but it is tied to a several more important process tweaks: Aadhaar-based OTP verification for Tatkal tickets, advance reservation charts eight hours before departure and revised waiting list caps—up to 60 per cent in AC, 30 per cent in sleeper, thanks to more data mining..
Yet it does not outright invalidate the Opposition’s query: why are you raising fares now, after a record Rs 2.5 lakh crore allocation has been made for railways in Budget 2025-26? Doesn’t the government have more money than before?
The answer lies in the calculus of operational cost. Salaries, fuel, maintenance, security and the introduction of new services all carry enormous costs. But the expense that pinches the most is the ballooning pension bill, which is within touching distance of Rs 70,000 crore and rising every year.
Freight revenues can bail the railways out only so much. And with passenger earnings projected to climb from Rs 75,215 crore in FY25 to Rs 92,800 crore in FY26, some of it will also be down to making up the shortfall, filling the gap with yet more class-based pricing.
There’s also the more profound optics of fairness. This still leaves half of all rail passengers—suburban and short-distance in particular—paying highly-subsidised rates, whereas the higher expectations of better-off passengers for clean, punctual and modern trains cannot be carried through cross-subsidisation alone.
Finally, this hike is just as much about messaging as money. It’s the railways asserting itself as a modern, service-driven utility, not a big old legacy network of some other era dragging along the baggage of populism. That said, for the wheels to turn faster, cleaner and more reliably in the future, passengers will have to chip in, perhaps only a little bit. Most of all, it is a shift in the public transport conversation in India: from entitlement to expectation.
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