In the middle of the nineteenth century railway, as a means of public transport was introduced in India by the colonial government. The railways were built through public-private enterprise from 1849-69, wherein the railway was constructed by the private railway companies with a guarantee of 5% interest given by the government. In return, the government reserved to itself the power of supervision and control on the working of the railways, including rates and fares. Bombay Baroda Central India Railway (henceforth referred to as BB&CIR) was one such guaranteed company in the Bombay Presidency. This paper seeks to delve into the influence of the passengers’ fares on the demand for the railway by the public and consequently its impact on the earnings of the BB&CI Railway during the first ten years of its operation from 1860-1870. Also, it attempts to probe into the approach of the railway company and the government towards the passengers’ fares. This paper is primarily based on rich archival material excerpted from the Maharashtra State Archive and is supplemented with secondary sources.