Highlights of the 2025- 26 Railways Budget

Union Finance Minister Nirmala Sitharaman presented her eighth consecutive budget on 1 February 2025. It was the Narendra Modi government's second budget after returning to power for the third straight term. There has been no change in the budgetary support for the Indian railways as compared to last fiscal year and has been kept at Rs 2.52 lakh crore for the fiscal year 2025-26.

Railway Budget and the Union Budget

• The Railway budget was presented with the British Indian Government Budget during the British rule of India.
• On the recommendation of the Acworth committee, in 1924 the railway budget was separated from the  British Indian Government’s Budget.
• The first railway budget of Independent India was presented by John Mathai on 20 November 1947.
• In 2017-18, the railway budget was merged with the Union Budget and it was presented in the Parliament by Union Finance Minister Arun Jaitley.
• The record for presenting the maximum railway budget -8 times- is held by Babu Jagjivan Ram.

Highlights of the Railway Budget 2025-26

Allocation for Capital Expenditure 

The total capital expenditure target for 2025-26 is Rs 2,62,000 crore. The break-up is as follows:

• Budgetary allocation - Rs 2,52,000 crore, same as last fiscal year 2024-25.
• Extra budgetary source- Rs 10,000 crore,
• Nirbhaya Fund - Rs 200 crore 
• From internal resources of Railways- Rs 3,000 crore.

Capital expenditure means the railway will invest the money in essential infrastructure projects like rail track expansion, rolling stock procurement, electrification, signaling improvements, and station modernisation, with a continued focus on ensuring safety.

Railways Financial Performance

• The Operating Ratio target for the Indian railways in 2025-26 is 98.43 percent, compared to 98.90 percent achieved during the 2024-25 financial year.
• It means that the railways spend Rs 98.43 to earn Rs 100.
• The operating ratio is used to measure the financial efficiency of any organisation. If the Operating ratio is less than 100, then it means the organsiation /railway is in profit, and if it is above 100, then the organisation/ railway is in loss. 
• The lower the operating ratio, the more efficient the railway is.

Revenue generation target

• The target for the railway's total revenue generation in 2025-26 is Rs 3.02,000 crore, as compared to Rs 2,79,000 crore revised estimate of 2025-25.
• For the first time in the Indian railways history, the revenue generation in one year is expected to cross 3 lakh crore.
• The revenue generation target from freight transportation in 2025-26 is Rs 1,88,000 crore, an increase of 4 % as compared to last year.
• The revenue generation target from the Passenger segment in 2024-25 is Rs 92,800 crore, an increase of 16 %. In 2024-25 it was 82,000 crore. 
• The railway expects to increase its passenger revenue by increasing the number of trains and through a higher volume of passenger traffic and freight traffic.

Indian Railway to become 2nd after China 

• The Indian railway has set a target of 1.6 billion tonnes of freight traffic by 31st March 2026. 
• If the Indian railways reach this target then it will become the second largest goods-carrying railways in the world after China.

Target of 100% electrification by 31st March 2026

Indian Railway has set a target of 100% electrification of rail routes by 31st March 2026. 

Electrification of Railway Track 

• On 3rd February 1925, history was created in India when the first electric train ran from  Bombay VT(now Chhatrapati Shivaji Maharaj Terminus) to Kurla Harbour in Mumbai.
• The first electric route to be electrified in the country after Independence was the Howrah - Burdwan section in West Bengal in 1958.

Focus on more trains to improve passenger convenience 

According to the Railway Minister Ashwini Vaishnav, the Indian Railways will introduce 200 new Vande Bharat trains, 17,500 general non-AC coaches,100 Amrit Bharat trains, 50 Namo Bharat rapid rail in the next two to three years.

Out of 17,500 general coaches, 1400 will be inducted in 2025-26 and 2,000 coaches will be inducted in 2026-27.

Indian Railways manufactures its passenger coaches at:

• Integral Coach Factory (ICF), Chennai, Tamil Nadu. It was set up in 1955.
• Rail Coach Factory (RCF)- Karputhala, Punjab. It started its production in 1987.
• Modern Coach Factory (MCF)- Lalganj, in Raebareli district of Uttar Pradesh. It started its production in 2014.

The Indian Railways is replacing its ICF passenger coaches with the Linke-Hofmann-Busch (LHB) coaches. The LHB has better safety and convenience features.

Railway Safety 

Out of the total allocation, Rs 1.14 lakh crore has been allocated for improving safety. In 2024-25, Rs 1.08 lakh crore were allocated for enhancing the safety features of the Indian railways.