The minimum fare for an ordinary bus service will be Rs eight, up from Rs seven, and for fast passenger services, the fare will be Rs 11 instead of Rs 10.
Along with the minimum fare, charges per kilometer for all category of services have also been raised. The hike ranges between eight paise and Rs six.
Chief Minister Pinarayi Vijayan took the decisions at a cabinet meeting here.
Talking to reporters, transport minister A K Saseendran said the hike was necessary to sustain the transport sector.
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"The government is not happy taking such a decision," he said.
Speaking on the revision of concessional fares for students, Saseendran said there would be a marginal increase of Re one for students travelling up to 40 kms.
The announcement was made on the basis of the recommendations of Justice C Ramachandran panel that went into the problems faced by the transport industry, a release from the Chief Minister's office said.
The Congress-led UDF Opposition slammed the LDF government's move, saying the state government was putting more burden on the people who were already suffering due to steep raise in price of essential commodities.