Budget 2025 Expectations: Railway Budget

30 Jan 2025 , 10:33 AM

The upcoming Union Budget 2025 is scheduled to be delivered on 1st February 2025, with the Finance Minister Nirmala Sitharaman expected to lay strong focus on the Railway Sector. The government is dedicated to modernise Indian Railways with a higher allocation of capital expenditure. 

In the Union Budget 2024 presented in July 2024, the government has allocated the highest-ever expenditure of ₹2,62,200 Crore. 

Experts predict that this trend may continue in this year’s budget as well, with high-speed rail projects, expansion of Vande Bharat trains, and station redevelopment under the Amrit Bharat Scheme on the top of list.

These initiatives are directed at modernising infrastructure, improving passenger convenience, and putting Railways sector at the forefront of economic growth and activity.

On the freight side, there is an increased focus on boosting funding for designated freight corridors (DFCs) to increase efficiency and support India’s growing logistics sector. The government is also anticipated to prioritize decarbonization, transferring freight movement from road to rail to achieve a 40% modal share by 2030.

Even though the Indian Railways sector has ambitious plans, it continues to be stuck in poor operational ratios. The Union Budget 2024 had an operating ratio of 98.22%, which only slightly improved from the revised estimate of 98.65% in 2023-24.

Therefore, following are the key things that could be considered in future:

1. Balancing passenger and freight services
2. Optimisation of Workforce costs.
3. Applying measures to improve operational efficiency.
4. Expansion of Public-Private Partnerships

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