Railway Budget 2025 Latest announcements: In a letdown for Indian Railways, the Union Budget for FY26, presented on February 1 by Finance Minister Nirmala Sitharaman, has maintained the allocation at Rs 2.55 lakh crore, the same as the previous fiscal year (FY25). However, with no major reforms or increases in funding for key projects like gauge conversion and rolling stock improvements, the railway sector faces challenges in meeting its growth targets.

In the last Budget, the gross budgetary support for Railways stood at Rs 2,55,200 crore, marking a 5% increase from Rs 2,40,200 crore in FY24, with an additional Rs 10,000 crore from extra-budgetary resources. For the second consecutive year, the capital expenditure (capex) allocation for Indian Railways remains unchanged at Rs 2.52 lakh crore for FY26, with a focus on safety and electrification.

Major announcement for Infrastructure, aviation sector

Additionally, important announcements were made for Aviation sector. In her speech, FM Sitharaman stated that the UDAN scheme has benefited 1.5 crore middle-class individuals, connecting 88 airports and making 619 routes operational.

She announced that a modified UDAN scheme will be launched to engage additional 120 new destinations, aiming to carry 4 crore more passengers over the next 10 years. “Govt to facilitate greenfield airports in Bihar to meet future needs of the state,” said FM Sitharaman.

Furthermore, 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.

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.

Focus on ‘Sabka Vikas’

FM Sitharaman also 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. “In this Budget, the proposed development measures span 10 broad areas, focussing on the poor, youth, farmers and women,” she said.

The Modi government is expected to announce record capital expenditure for infrastructure, particularly highways and Indian Railways, to drive economic growth. Meanwhile, chaos erupted in Parliament as the Opposition protested when Nirmala Sitharaman began her budget presentation.