Indian Railways is set for significant expansion following a substantial budget allocation in the Union Budget for the financial year 2025-26. The railway network is expected to introduce 200 Vande Bharat trains, 100 Amrit Bharat trains, 50 Namo Bharat rapid rail services, and 17,500 general non-AC coaches over the next two to three years, improving connectivity, safety, and passenger comfort across the country.
Union Minister for Railways Ashwini Vaishnaw described the budget as “amazing” and expressed gratitude to the Prime Minister and Union Finance Minister for allocating INR 2.52 lakh crore (USD 30 billion) in gross budgetary support to the Ministry of Railways for the second consecutive year. He highlighted that the introduction of new trains and modern coaches would greatly benefit middle- and lower-income passengers.
Indian Railways to invest in safety and infrastructure
The budget outlines a broader infrastructure development plan for Indian Railways, amounting to INR 4.6 lakh crore (USD 55.3 billion). A key focus is enhancing safety, with INR 1.16 lakh crore (USD 14 billion) allocated to various safety improvement projects. Speaking at Rail Bhawan after the budget presentation, Vaishnaw emphasised that these investments would not only create employment opportunities but also provide financial relief to the middle class through reduced income tax burdens.
Beyond the direct budgetary allocation, the government has also provided INR 10,000 crore (USD 1.2 billion) from extra-budgetary resources, bringing the total capital expenditure (Capex) to INR 2.62 lakh crore (USD 31.5 billion). This funding will be used for asset acquisition, construction, and infrastructure modernisation. The budget also includes INR 200 crore (USD 24 million) from the Nirbhaya Fund for passenger safety measures, while Indian Railways plans to raise an additional INR 3,000 crore (USD 360 million) from internal resources.
The reimbursement of losses from operating strategic railway lines has been set at INR 2,739.18 crore ($330 million) for 2025-26, compared to INR 2,602.81 crore (USD 313 million) in the revised estimates for 2024-25. Additionally, INR 706 crore (USD 85 million) has been allocated for debt servicing of market borrowings for national projects. As a result, the total revenue expenditure for Indian Railways in 2025-26 is projected to be INR 3.02 lakh crore (USD 36.3 billion), up from INR 2.79 lakh crore (USD 33.6 billion) in the previous fiscal year.
Growth in freight and high-speed rail
Indian Railways is on track to become the world’s second-largest freight carrier, aiming to transport 1.6 billion tonnes of cargo by the end of the fiscal year. The government has also set an ambitious target of 7,000 km of high-speed rail corridors, supporting speeds of up to 250 km/h by 2047.
Sustainability and electrification
As part of its sustainability initiatives, Indian Railways aims to achieve 100% electrification by the end of 2025-26. The budget also highlights the use of small modular reactors as a clean energy source, with the railway sector expected to play a key role in adopting non-fossil energy solutions.
With these investments, Indian Railways is poised for a major transformation, improving passenger experience, boosting freight transport, and supporting India’s long-term economic and sustainability goals.
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