Budget 2026 Expectations: Railways in Spotlight as FM Sitharaman Prepares for Key Address
With merely a day remaining until the Union Budget 2026 presentation, anticipation is mounting across India, particularly for the railway sector, which serves as the nation's economic backbone. Finance Minister Nirmala Sitharaman is scheduled to deliver her ninth consecutive Budget speech at 11 am on Sunday, 1 February, setting the stage for critical fiscal announcements.
Expert Predictions: Higher Allocations and Strategic Investments
As the Finance Minister gears up to present the India Budget tomorrow, industry experts and analysts are forecasting enhanced allocations towards railways, a sector that received significant benefits in the previous budget. Historically, railways have consistently been a priority area for budget allocations due to their pivotal role in advancing India's economic objectives.
According to a Bloomberg survey involving 29 economists, the government is expected to increase spending on infrastructure projects, including roads, ports, and railways. The survey also highlights potential expansions in export incentive schemes and reforms in the import-duty regime. The news agency reports that the government's push for infrastructure capital expenditure is likely to continue, with both roads and railways sectors anticipated to secure higher budgetary allocations.
Modernization of the nationwide railway network remains a key priority, with emphasis on safety enhancements, speed improvements, and passenger comfort upgrades. This aligns with the broader vision of bolstering India's transport infrastructure.
Analyst Insights: Capex Growth and Project Acceleration
Analysts from Motilal Oswal project a capital expenditure increase in the India Budget 2026 specifically for the railways sector. In a recent note, they stated, "We expect a rise in the capex for railways, which could go up by 8-10% year-on-year. Higher budgeted capex in the abovementioned infrastructure projects should lead to higher project awarding in the rail and road segments, which should benefit infrastructure names under our coverage."
Experts at Bajaj Broking added that the Budget is likely to demonstrate increased focus on safety systems such as Kavach, station modernization, and faster project execution. Rizwan Soomar, CEO and Managing Director for MENA and India Subcontinent at DP World, emphasized in a statement to Livemint, "Strategic Budgetary investments in port-led, multimodal connectivity—particularly rail-based freight corridors, inland terminals, logistics hubs, and green infrastructure—will reduce trade costs, improve manufacturing productivity, create employment, and accelerate GDP growth."
Recap of Budget 2025: Building on Past Initiatives
In Budget 2025, the Centre reinforced its commitment to railway improvement by allocating ₹2.52 lakh crore, as announced by Union Railway Minister Ashwini Vaishnaw. During her Budget speech, FM Sitharaman outlined several initiatives, including:
- Development of new products and efficient logistics services for small farmers and Small and Medium Enterprises.
- Integration of Postal and Railways networks to enable seamless parcel movement solutions.
- Implementation of 2,000 km of network under Kavach, the indigenous safety technology, as part of Atmanirbhar Bharat in 2022-23.
- Manufacturing of 400 new-generation Vande Bharat Trains with enhanced energy efficiency and passenger experience over the next three years.
Separately, Railway Minister Vaishnaw detailed that the Union Budget allocated ₹4.6 lakh crore for infrastructure development projects and ₹1.16 lakh crore for safety initiatives across the network. He also announced plans to manufacture 100 Amrit Bharat, 50 Namo Bharat, and 200 Vande Bharat trains—including sleeper and chair car variants—within the next two to three years. When combined with PPP investments, the total budget reached ₹2.64 lakh crore, marking a comprehensive effort to elevate railway standards.
As Budget 2026 approaches, stakeholders eagerly await further developments that could shape the future of India's railway infrastructure and its contribution to national growth.
