Railway Budget 2025 Highlights

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2025 on February 1, 2025, at 11:00 AM. This year, the Railway Budget, which was previously presented separately until 2016, will be included in Sitharaman’s Budget speech. With no separate Railway Budget being presented, the Budget speech is eagerly awaited for insights into the allocation for Indian Railways and major project updates.

The Indian Railways is projected to see a 15-20% rise in capital expenditure for FY26 in the upcoming Union Budget, as it nears complete utilization of the current year's allocation. The total capital expenditure could surpass a record Rs 3 lakh crore, compared to the current fiscal's Rs 2.65 lakh crore.

Modernization and Expansion Plans

Railway Budget 2025 may see the announcement of modern trains like the Vande Bharat sleeper, Vande Metro, bullet trains, and more. A mention of the newly completed railway link to Jammu and Kashmir may also find mention in FM Sitharaman’s Budget speech. Indian Railways’ key objectives for the coming year may include completing station upgrades, launching modern trains, and addressing network congestion.

The enhanced budget allocation is expected to prioritize track expansion, infrastructure modernization, and acquisition of vital equipment including locomotives, coaches, and wagons. Additional funding is likely for the Mumbai-Ahmedabad High Speed Rail Corridor (MAHSR), commonly known as the bullet train project, to hasten its development.

Focus on Safety and Comfort

Plans include launching Vande sleeper trains in the next fiscal year, offering improved comfort for long-distance travel. Current year's planned spending includes Rs 50,903 crore for rolling stock. Rs 1.2 lakh crore was allocated to capacity enhancement, covering new lines, gauge conversion, track doubling, facilities, electrification, PSU investments, and metropolitan transport. Safety initiatives received Rs 34,412 crore.

For FY25, Indian Railways assigned Rs 21,000 crore to the National High Speed Rail Corp. Ltd (NHSRCL) for the bullet train project. A significant funding increase is expected to accelerate infrastructure development along this route.

Economic Implications and Future Outlook

Industry representatives have requested continued substantial capital investments to encourage private sector involvement and support the slowing economy. India's GDP growth is expected to decline to 6.4% this fiscal year from 8.2% in FY24, reaching a four-year low. The government allocated Rs 11.1 lakh crore for capital expenditure this year, up from Rs 10 lakh crore in FY24. FY26 is anticipated to have higher targets for public-private partnership (PPP) investments.