With the Union Budget 2026 set to be presented on February 1, Indian Railways is once again under the spotlight, as policymakers and industry stakeholders look for cues on capital support, safety priorities and reform momentum for the national transporter. Over the past few years, railway allocations have remained on an upward trajectory, reflecting the government’s focus on infrastructure-led growth.

In the current financial year (2025–26), Indian Railways received a gross budgetary support of about ₹2.52 lakh crore. This allocation covered capital expenditure on new lines, doubling projects, rolling stock, safety upgrades and station redevelopment. By December 2025, the railways had already utilised more than 80 per cent of the allocated funds, indicating strong execution and faster project implementation on the ground.

Rising Allocations Over the Years

Railway allocations have steadily increased over the last five budget cycles. In Budget 2023–24, the sector received around ₹2.40 lakh crore, a sharp rise compared with pre-pandemic levels. Subsequent budgets maintained this high level of support, with allocations in Budget 2025–26 remaining broadly in line with the previous year.

These investments have supported several flagship initiatives. The expansion of semi-high-speed Vande Bharat trains, near-complete electrification of the rail network, and the rollout of the indigenous train protection system Kavach have been key focus areas. Freight corridor development and capacity enhancement projects have also gained momentum, helping railways improve efficiency and reduce logistics costs.

What experts expect from budget 2026

As expectations build ahead of Budget 2026–27, experts anticipate a further, though measured, increase in allocations for Indian Railways. Analysts and rating agencies estimate that the outlay could rise to around ₹2.7–2.75 lakh crore, translating into a 2–10 per cent increase over the current year. The emphasis is expected to remain on quality spending rather than just scale.

Industry observers believe safety-related investments will continue to dominate, with wider Kavach deployment, modern signalling systems and track renewal likely to receive priority. Station redevelopment under the Amrit Bharat Station Scheme, expansion of Vande Bharat sleeper trains and upgrades to passenger amenities are also expected to feature prominently.

At the same time, experts argue that the upcoming budget could signal reforms beyond funding, including steps to improve freight competitiveness, rationalise tariffs and strengthen rail-based logistics. With capital expenditure already at record levels and utilisation remaining strong, the Union Budget 2026 is seen as crucial in shaping Indian Railways’ role in supporting economic growth and improving connectivity in the years ahead.