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

Spotlight is on rail stocks as investors are anticipating increased allocations from this year’s budget. These key rail stocks include Rail Vikas Nigam Ltd (RVNL), Indian Railway Finance Corporation Ltd (IRFC), RITES Ltd, IRCTC, Railtel Corporation of India Ltd amid others.

Currently, around 70% of freight movement in India relies on roadways, with trucks consuming more than half of the nation’s petrol and diesel. Over the past decade, India’s road network has expanded significantly, with national highways now covering over 150,000 km. This expansion has contributed to a growing reliance on trucks for freight transport, which has, in turn, created inefficiencies in logistics.

Additionally, the absence of dedicated freight corridors and a lack of robust rail connectivity to non-major ports have exacerbated the issue, further increasing India’s dependence on road freight.

Union Finance Minister Nirmala Sitharaman departs from the Ministry of Finance. She will present and deliver the Union Budget 2025 in Parliament using a tablet, moving away from the traditional ‘bahi khata’.

Finance Minister Nirmala Sitharaman, dressed in a white saree, is preparing to deliver her eighth consecutive Union Budget speech today. She has already arrived at the Ministry of Finance. Stay with us for all the updates on the ‘Bahi Khata’.

Infrastructure sector stakeholders are urging for GST rationalization, tax incentives for green building technologies, and a boost in capital expenditure (capex) for roads, railways, and ports. They are also calling for stronger support for public-private partnerships (PPPs) and enhanced skill development programs to address workforce gaps in construction and infrastructure.

Key players from across the infrastructure landscape, including construction, real estate, transportation, and urban development, highlighted the need for fiscal reforms and policies that can alleviate the financial pressures on infrastructure projects.

The Economic Survey notes that during FY25, the expansion of the railway network has progressed at a pace similar to the previous year, while the addition of rolling stock saw a significant increase. From April to October 2024, 17 new pairs of Vande Bharat trains were introduced, and a total of 228 coaches were produced.

Union Finance Minister Nirmala Sitharaman has arrived at the Ministry of Finance ahead of presenting the Union Budget 2025 in Parliament today.

Chief Economic Advisor Dr. V. Anantha Nageswaran arrives at the Ministry of Finance as Union Finance Minister Nirmala Sitharaman prepares to present Union Budget 2025 in Parliament today.

Union Finance Minister Nirmala Sitharaman departs from her residence to present the Union Budget2025 in Parliament today.

Kavach, the indigenously developed Automated Train Protection system, has received Rs 1,547 crore in investment until November 2024, with version 4.0 approved in July 2024.

The development of Dedicated Freight Corridors (DFCs) is now a critical necessity for expanding India’s rail network. DFCs aim to enhance freight efficiency and reduce logistical costs, which is vital for sustaining economic growth. Two key flagship projects—the Eastern DFC, connecting Punjab to Bihar, and the Western DFC, linking Maharashtra to Uttar Pradesh—have already achieved major milestones. The Eastern DFC is fully operational, and large sections of the Western DFC are also functioning.
Looking ahead, the next phase of rail network development will focus on new DFCs, such as the East-West (linking Maharashtra to West Bengal), North-South (linking Haryana to Tamil Nadu), and East Coast (connecting West Bengal to Andhra Pradesh) corridors, as outlined in the National Rail Plan.

The Economic Survey highlights ongoing efforts to modernize signalling and safety systems for enhanced efficiency and safety. Key initiatives include:

Replacing mechanical signalling with Electrical/Electronic Interlocking systems, with 25 stations upgraded in FY25, and 9 zonal railways now free from mechanical systems.

Kavach: The Automated Train Protection system received Rs 1,547 crore in investments, and version 4.0 was approved in July 2024.

Electronic Interlocking (EI): Installed at 227 stations in FY25, bringing the total to 3,576 stations. The first Direct Drive Interlocking system was launched at Tajpur station.

Automatic Block Signalling (ABS): Extended across 4,906 km to boost capacity on high-density routes.

Signal Design Automation Tool: Released version 5.0 in September 2024 to automate route control chart generation for station yards.

The Union Budget for 2025 will be presented by FM Sitharaman at 11 am on February 1, 2025. In her speech, she will outline the budgetary allocations and revenue expectations for the upcoming financial year in the Lok Sabha. The Union Budget will be streamed live on Parliament’s official channels, Doordarshan, Sansad TV, and the government’s official YouTube channels.

Finance Minister Nirmala Sitharaman will deliver the Union Budget 2025 speech at 11:00 AM, which will include the budget allocation for Indian Railways. Stay tuned for key announcements and updates.

Gati Shakti Multi-Modal Cargo Terminal (GCT): As of October 31, 2024, 91 GCTs have been commissioned, and 234 locations have been approved.

Net Zero Carbon Emission: Indian Railways aims to achieve 30 GW of renewable energy by 2029-30. By October 2024, 375 MW of solar and 103 MW of wind energy capacity have been commissioned.

Major Economic Corridors: A total of 434 projects, worth Rs 11.17 lakh crore, have been identified across three major railway corridors, mapped on the PM GatiShakti portal.

Public-Private Partnership (PPP): 17 projects, valued at Rs 16,434 crore, have been completed, and 8 ongoing projects worth Rs 16,614 crore are currently under the PPP model.

Mumbai-Ahmedabad High-Speed Rail Project: Sanctioned in December 2015, this 508 km project, backed by Japan, now has a revised cost of Rs 1.08 lakh crore. As of October 2024, it has achieved 47.17% physical progress, with Rs 67,486 crore spent so far.

Dedicated Freight Corridors (DFCs): By November 2024, 2,741 km (96.4%) of the 2,843 km planned DFC network has been commissioned. The DFCs have significantly transformed logistics in India, allowing higher freight volumes without interference from passenger trains.

Spotlight is on rail stocks as investors are anticipating increased allocations from this year’s budget. These key rail stocks include Rail Vikas Nigam Ltd (RVNL), Indian Railway Finance Corporation Ltd (IRFC), RITES Ltd, IRCTC, Railtel Corporation of India Ltd amid others.

India‘s 92-year-old Railway Budget, a historic annual presentation since 1924, was merged with the General Budget following a recommendation by a NITI Aayog commission. The proposal, which aimed to streamline financial presentations, was initially put forth by the then Railway Minister, Suresh Prabhu, who later wrote to Finance Minister Arun Jaitley to consider combining the two budgets.

In 2016, Finance Minister Arun Jaitley brought the matter to the Rajya Sabha, leading to the formation of a committee tasked with planning the merger. The decision was part of efforts to simplify financial planning and enhance overall governance, bringing railway financing under the broader scope of India’s national fiscal policy. This shift ended a tradition that had been in place since the first Railway Budget was presented in 1924.

Finance Minister Nirmala Sitharaman is expected to announce new trains on additional routes, contributing to the expansion of India‘s railway network, including on Katra-Banihal section. Under Prime Minister Modi’s leadership, expanding the railway network has been a key priority for the NDA government.

The Union Budget 2025-26 speech will begin at 11:00 AM today. The Railway Budget announcements will be made shortly after.

The primary focus areas for this year’s Railway Budget will include the modernization of Indian Railways, the development of dedicated freight corridors, rolling stock upgrades, safety improvements, and the creation of a robust infrastructure. These measures are designed to lay the foundation for a world-class railway system capable of meeting the demands of India‘s rapidly growing economy.

The Union Budget 2025-26 speech will begin at 11:00 AM today. The Railway Budget announcements will be made shortly after

Welcome to our live updates on the highly anticipated Railway Budget 2025-26! We’ll bring you all the key announcements, priorities, and their impact on India’s rail network. From safety enhancements to passenger amenities and infrastructure improvements, stay tuned for real-time updates, expert analysis, and insights into the future of Indian Railways.