Union Budget 2025: Railways allocation remains unchanged at ₹2.65 lakh crore, budget for customer amenities, investment in PSUs slashed

The Budget allocation for Indian Railways for FY 2025-26 stands at ₹2.65 lakh crore, the same as last year’s allocation. The allocations for customer amenities in the Railways and investments in public sector units and joint ventures have been slashed.

At a press briefing following the Union Budget 2025-26 presentation on Saturday (February 1, 2025), Union Railways Minister Ashwini Vaishnaw said, “The Railway Capex stands at ₹2.52 lakh crore from the total ₹2.65 lakh crore allocation that include(s) Public Private Partnership investments.”

Sources in the Railways told The Hindu that in FY 2024-25, of the allocated budget of ₹2.65 lakh crore, the expenditure till January 23 this year stood at ₹2.09 lakh crore (79.33%). The actual utilisation of the budget for FY 2023-24 stood at ₹2.45 lakh crore, Budget documents reveal.

Responding to a question on no increase in the allocation, Mr. Vaishnaw said that unchanged allocation indicated that overall the continuous push for influx of Capex is being maintained.

Mr. Vaishnaw further said that new projects that have been considered while framing the Budget run up to the tune of ₹4.6 lakh crore. “If one rail project gets approved, the life cycle of that project will run into four to five years. These new projects take into account laying of new lines, doubling, quadrupling, flyovers, underpasses, construction of new workshops, plant and machineries in workshop, rolling stock and station redevelopment,” he said.

Allocation to Freight Corridor Corporation down to ₹500 crore

A closer look at the Budget document reveals that allocation to developing customer amenities in Indian Railways has continued to decline from ₹15,510 crore in FY 2024-25 (budget estimate) to ₹12,993.97 crore (revised estimates) and now to ₹12,118.39 crore in the FY 2025-26. Customer amenities may include maintaining toilets, standardising signals, brightening up enquiry and booking office, sealing stations to provide specific entry, and exit and prevention of unauthorised entries, repair of water trolleys, lights, fans, seating and so on.

Also, the allocation for investment in Public Sector Units (PSU) and Joint Ventures (JV) has gone down from the revised estimate of ₹27,570.77 crore in FY 2024-25 to ₹22,444.33 crore in FY 2025-26.

Mr. Vaishnaw said that by March 2025, the Indian Railways will achieve an important milestone of carrying 1.6 billion-tonne cargo carrying capacity. “With this, we become the second largest cargo carrying railway in the world, next only to China, which has the capacity of 3.7 billion tonnes.”

Allocation to Dedicated Freight Corridor Corporation of India, which is a Public Sector Unit (PSU) of the Indian Railways, has decreased from ₹5,499 crore in FY 2024-25 (revised estimate) to ₹500 crore in FY 2025-26.

Mr. Vaishnaw also said that in the upcoming financial year, the Railways will achieve 100% electrification of rail network. He added that ₹3 lakh crore in passenger revenue will be achieved for the first time in FY 2025-26.

‘Bullet’ train project

The Railways Minister said that India is also working on producing Indigenous high-speed ‘bullet’ train, being devised by Defence PSU BEML and Rail PSU National High Speed Rail Corporation Limited (NHSRCL) with a target of running trains at speed of 280 kmph, and that the Japanese government is on board with the indigenous plan. In 2023-24, ₹18,295 crore was utilised towards the project, and FY 2024-25 Budget estimate for it stood at ₹21,000 crore. The allocation has been reduced to ₹19,000 crore in the Budget for FY 2025-26.

Mr. Vaishnaw also said that the FY 2025-26 Budget has accounted for manufacturing 100 non-AC Amrit Bharat trains, 50 NAMO Bharat trains certified for running at 130 kmph for shorter distance city connections and 200 Vande Bharat trains (sleeper and chair car trains). “The budget will be utilised towards manufacturing 17,500 general coaches approved, of which 1,200 have already been manufactured and year-on-year this capacity will be augmented for benefit of common masses,” he said.

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