Railway Subsidy: How much subsidy does the government provide on a train ticket?

India is known as the heartbeat of the railway system, with millions of people traveling by train every day. But do you know how much subsidy the government provides on a train ticket? Let’s dive into the details and find out.

A few days ago, the Railway Minister Ashwini Vaishnav revealed during his visit to Bijnor that the Indian Railways offers more than 55% subsidy on every ticket. For instance, when you purchase a train ticket, it clearly states that IR recovers only 57% of the cost on average.

This means that the railway system bears approximately 45-55% of the expenses incurred on your journey, depending on the ticket price. So, if you buy a ticket for Rs. 1000, the government subsidizes around Rs. 450-550.

Now, let’s talk about how the Indian Railways generates revenue to cover these subsidies. Apart from ticket fares, they offer various services such as cargo transport, advertising on platforms, and renting out shops at stations. Moreover, they earn significant revenue from renting trains and stations for film shootings. However, the major source of income for the Railways is the transportation of goods, accounting for approximately Rs. 1.62 lakh crore.

The financial report of the Ministry of Railways for the fiscal year 2022-23 mentions that the Indian Railways collected revenue of Rs. 2.40 lakh crore. This is an increase of 25% compared to the previous year. Out of this, freight transportation contributed the most with revenue of Rs. 1.62 lakh crore, followed by passenger services.

It is fascinating to see how the Indian Railways manages to provide such massive subsidies while generating revenue from a diverse range of sources. The railway system truly plays a crucial role in the country’s transportation infrastructure.