NEW DELHI: On the back of growing demand for AC3 class and premium trains, including Vande Bharat, Indian Railways has projected an estimated 16% increase in passenger revenue for the 2025-26 financial year, reaching an estimated Rs 92,800 crore. In contrast, the earnings from its freight segment are expected to grow at a more modest rate of 4.4%.
Budget documents show the share of passenger earnings in the total revenue has increased from 26.4% in 2022-23 to 28.6% in the revised estimate (RE) of current financial year and is projected to rise to 30.6% in FY26. Though earnings from freight movement remain the railway’s mainstay, rising share of passenger revenue will offer some elbow room to frame policies to attract more cargo from other modes of transport, particularly roads.
Data shows earnings from AC3 tickets could touch Rs 30,089 crore by March, an increase of nearly 20% from the last financial year. Railways has estimated revenue from this segment to go up by 23% in FY26 and generate Rs 37,115 crore. Documents also show that earnings from executive class and AC chair car classes have increased significantly in two years and is projected to rise further.
Revenue from passengers travelling in executive class is projected to touch Rs 698 crore by March, a 42% rise over last financial year. It is estimated to increase to Rs 987 crore in FY26. Similarly, the revenue from AC Chair Car is projected at Rs 4,280 crore by March surpassing the Budget Estimate (BE) of 2024-25 and an increase of 28.6% over last year. As per estimate for FY26, the earnings would be around Rs 5,626 crore, a growth of 31%.
Officials said the increase in passenger revenue will be from across classes as the national transporter will operate a greater number of trains with more general coaches to meet the travel demand of poor and lower middle class. In fact, data show that revenue projected for FY25 from second class (ordinary) – general coaches in inter-city trains – is projected at Rs 1,517 crore, almost double of last financial year.
Railway minister Ashwini Vaishnaw has dismissed any chance of fare hike. “The increase in passenger revenue will be driven by growth in passenger volumes. Passenger numbers have been increasing each year, and this year, total passengers are expected to rise to 7.5 billion. Next year, this will be around 7.8-7.9 billion passengers. So, revenue growth will purely be on the passenger count.”
