Railway Budget 2025 Highlights: Railways allocation remains unchanged at Rs 2.65 lakh crore for the second year in a row

Finance Minister Nirmala Sitharaman is about to begin the press conference post the Union Budget 2025 speech. FM Sitharaman says, "...One thing which I certainly would like to highlight is responding to the voice of the people, which is what Prime Minister Modi is known for in his administration. It's a very responsive government and as a result, the income tax simplification which I announced in July is already completed in its works and we shall bring the bill in the next week...So if we are talking of reform inclusive of taxation, the work is done. This budget also speaks about rationalization and customs. Tariffs are being brought down, tariffs are being simplified..."

The regional air connectivity scheme, UDAN, will receive Rs 540 crore, marking a 32% decrease from Rs 800 crore allocated last year.

In her speech, Sitharaman highlighted that UDAN has helped 1.5 crore middle-class citizens enjoy faster travel. She also emphasized the scheme’s expansion to support 120 new destinations and enhance regional connectivity, particularly in remote and North Eastern regions, over the next 10 years.

The UDAN allocation also includes provisions for airport revival and the commencement of RCS routes, along with Viability Gap Funding for North East connectivity. To further improve connectivity, a new scheme has been formulated for providing air connectivity and aviation infrastructure in the North East.

The allocation for Customs Cost Recovery (CCR) charges to the Airport Authority of India (AAI) and AAI Cargo Logistics and Allied Services Ltd (AAICLAS) for tier II and III cities has been raised to Rs 142.75 crore, up from Rs 124.17 crore in the previous fiscal.

Prime Minister Narendra Modi says "Usually the focus of the budget is on how the government treasury will be filled, but this budget is exactly the opposite of that. How will this budget fill the pockets of the citizens of the country, how will the savings of the citizens of the country increase and how will the citizens of the country become partners in development... this budget lays a very strong foundation for this. In terms of reforms, many important steps have been taken in this budget. Encouraging the private sector in Nuclear Energy is historic. It will ensure a big contribution of Civil Nuclear Energy in the development of the country."

For furthering PPPs and assisting the private sector in project planning, access to relevant data and maps from the PM Gati Shakti portal will be provided, said FM Sitharaman.

The scheme will also support helipads and smaller airports in hilly, aspirational, and North East region districts, said FM Sitharaman.

Simran Singh Tiwana, CEO Star Air, reacted to the budget announcements, said, "Star Air welcomes the government’s announcement of the modified UDAN scheme, which will introduce 120 new destinations across the country. This initiative aligns perfectly with our vision of enhancing regional connectivity by linking tier-3 and tier-2 cities directly to urban hubs, making air travel more accessible than ever."

"At Star Air, we firmly believe in aviation’s transformative power to bridge distances and connect communities. The government’s commitment to strengthening UDAN reinforces our mission and provides new opportunities to serve passengers efficiently while expanding our network. As we collaborate with authorities to implement these plans, we are excited to play a key role in India’s evolving regional aviation landscape. The success of this expansion will depend on the seamless execution of new routes and a stronger focus on helping airlines manage operational costs more efficiently. Ensuring sustainability in regional connectivity is essential for long-term success,” she added.

Patna airport will undergo capacity expansion, and a brownfield airport will be developed at Bihta to improve connectivity.

D(U) MP Sanjay Kumar Jha says, "The biggest announcement for Bihar is that it will have a greenfield airport. It is a huge announcement. A Makhana Board will be formed, 85-90% of Makhana is cultivated in Mithila area, Kosi area...There is global demand for Makhana now. Western Kosi irrigation system had been a long pending demand of the Mithila region. FM has made an announcement for this. Announcment for a food-processing institute has also been made. So, overall these announcements are very positive for Bihar...Taxation relief up to Rs 12 Lakhs is a major relief."

Union Finance Minister Nirmala Sitharaman makes no announcement on railways.

Union Finance Minister Nirmala Sitharaman highlighted that the government views the next five years as a unique opportunity to achieve "Sabka Vikas" (development for all) and promote balanced growth across all regions. She also noted that India’s development over the past decade, along with its structural reforms, has garnered global attention.

Finance Minister Nirmala Sitharaman announced that the 50-year interest-free loans to state governments have been extended for another year, as part of the government's Gati Shakti master plan. "The scheme of a fifty-year interest-free loan for capital expenditure to states will be continued this year with a total outlay of  RS 1.5 lakh crore," Sitharaman said.

FM Sitharaman stated that infrastructure ministries will create a 3-year pipeline of projects to be executed under the PPP model. She also announced an outlay of Rs 1.5 lakh crore for 50-year interest-free loans to states to boost infrastructure development.

Opposition MPs walked out of the Lok Sabha as Finance Minister Nirmala Sitharaman began delivering her budget speech. The protests, led by Samajwadi Party MPs including party chief Akhilesh Yadav, marked the start of her address. "Samajwadi Party demanded in Parliament that the government release the list of people who lost their lives in the Mahakumbh stampede," said Samajwadi Party.