Indian Railways Receives ₹2.65 Lakh Crore Budget Allocation for FY 2025-26

The Government has allocated ₹2,65,000 crore as gross budgetary support to Indian Railways for the financial year 2025-26, the same as the previous fiscal year.

However, allocations for customer amenities in the Railways and investments in public sector units and joint ventures have been reduced. Additionally, ₹10,000 crore has been provided from extra-budgetary resources to support modernisation and operational expenses, taking the total capital expenditure (Capex) to ₹2,75,000 crore.

Funding Sources and Utilisation

The expenditure on asset acquisition, construction, and replacement will be met through funds from Gross Budgetary Support (including the Railway Safety Fund and Rashtriya Rail Sanraksha Kosh) as well as Indian Railways’ General Revenues.

Furthermore, a provision of ₹200 crore from the Nirbhaya Fund has been included in the budget, and Indian Railways plans to mobilise an additional ₹3,000 crore from its internal resources.

Strategic Lines and Debt Servicing

The reimbursement for losses incurred in operating strategic lines has been set at ₹2,739.18 crore in the Budget Estimate (BE) 2025-26, compared to ₹2,602.81 crore in the Revised Estimates (RE) for 2024-25. Additionally, ₹706 crore has been allocated for debt servicing related to market borrowings for National Projects.

With these allocations, the net revenue expenditure of Indian Railways is projected at ₹3,02,100 crore for FY 2025-26, compared to ₹2,79,000 crore in the previous fiscal’s revised estimate. The current fiscal’s gross budgetary support is nearly nine times the ₹28,174 crore allocated in 2013-14, highlighting the substantial growth in railway funding over the years.

Freight and High-Speed Rail Expansion

Speaking to the media, the Union Railway Minister announced that Indian Railways is poised to become the second-largest freight-carrying railway system globally, targeting 1.6 billion tonnes of cargo by the end of this fiscal year.

He also outlined India’s ambitious goal of establishing a 7,000 km high-speed rail network supporting speeds of up to 250 km per hour by 2047.

Electrification and Sustainability Efforts

On the sustainability front, the Railway Minister reaffirmed the commitment to achieving 100% electrification by the end of FY 2025-26. He also emphasised that, in line with the Budget’s announcement regarding small modular reactors as a non-fossil energy source, Indian Railways will take the lead in electrification efforts to enhance sustainability.

Railway Infrastructure and Safety Investments

The Union Budget for 2025-26 outlines infrastructure development projects worth ₹4,60,000 crore for the Indian Railways. In a significant move to enhance safety, ₹1,16,000 crore has been earmarked for various railway safety projects.

The Railway Minister, addressing the media at Rail Bhawan after the budget presentation, highlighted that the budget not only aims to generate employment through infrastructure investments but also provides relief to the middle class by reducing the income tax burden.

Expansion of Train Services

The country can expect the introduction of:

1. 200 new Vande Bharat trains
2. 100 Amrit Bharat trains
3. 50 Namo Bharat rapid rail trains
4. 17,500 general non-AC coaches These additions will be rolled out over the next two to three years, significantly improving passenger services across India.

Minister’s Statement 

Calling the Union Budget “amazing,” Union Railway Minister Ashwini Vaishnaw expressed gratitude to the Prime Minister and the Union Finance Minister for the substantial allocation of ₹2,65,000 crore for the Ministry of Railways for the second consecutive year. He emphasised that the introduction of new trains and modern coaches will greatly benefit the low and middle-income groups, further strengthening the railway sector’s role in India’s economic growth and mobility.

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