Use of surge-price model to decide premium train fares is an experiment, the Indian Railways said, following a backlash on social media and from opposition political parties in the country.
Indian Railways, the government-owned enterprise that operates India's railway network, had introduced flexi fares for Rajdhani, Shatabdi and Duronto -- the country's three fastest trains -- on Wednesday.
Introduction of the new pricing policy means that passengers in some cases will have to pay up to 1.5 times the base price if they are late in booking an in-demand train berth.
The move was swiftly criticised by many for being "anti-people", especially because the new pricing model was rolled out just ahead of India's festive season.
"We have introduced the dynamic fare system on an experimental basis. We will review it after some time and see what necessary measures can be taken further," Chairman Railway Board AK Mital said.
Meanwhile, Indian Railways justified the hike in fares as its financial position was "not very good".
"At present, we are facing a loss of Rs 33,000 crore in the passenger segment as we charge 36 paisa for one km of travel," Railway Board Member (Traffic) Mohammad Jamshed told Press Trust of India.
This coupled with the fact that the revenue target has been increased by Rs 6,000 crore from the previous fiscal year.
Also, augmented amenities on trains and platforms -- the government is spending Rs 1,800 crore on improving passenger facilities -- has coerced the Indian Railways to introduce the new pricing model, Jamshed further said.