In the Union Budget 2025, the government has made a bold move to reignite economic growth by focusing on the middle class. Union Finance Minister Nirmala Sitharaman’s announcement of income tax exemptions for annual incomes up to Rs 12 lakh and revised tax slabs brought relief to millions of citizens. However, one significant sector, railways, saw little attention, as the capital expenditure for the sector remained unchanged from the previous year at Rs 2.52 lakh crore for 2025-26.
Similarly, the budget for roads was also held steady at Rs 2.72 lakh crore, sparking mixed reactions among industry leaders who had expected more focus on critical infrastructure investments like railways. Railway stocks, including major names like IRCTC and IRCON, saw a sharp decline after the Finance Minister’s address, having soared earlier following the Economic Survey 2025’s optimistic outlook.
The Economic Survey for the 2024-25 fiscal year highlighted that although the expansion of the railway network slowed by 10%, production of rolling stock—such as wagons and locomotives—rose significantly compared to the previous year. The report noted that while 41 Vande Bharat trains were introduced in FY 2023-24, the ongoing fiscal year witnessed 17 new trains until October, contributing to a total of 68 Vande Bharat trains in operation nationwide.
Despite these developments, the production of Vande Bharat coaches showed a decline, with 456 produced in FY 2023-24 compared to 228 in FY 2024-25 up to October. These figures suggest a slowdown in railway expansion, which many industry experts hoped would be addressed in the Budget.
The railway budget, once presented separately from the Union Budget until 2017, was merged into the general budget following recommendations from the NITI Aayog committee led by Bibek Debroy. This change aimed to streamline government finances and improve transport planning across various modes, including highways, railways, and waterways. However, the absence of significant reforms or new initiatives for railways in Budget 2025 signals that the sector may have to wait longer for a much-needed boost.
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