Railway budget expectations 2026: Finance Minister Nirmala Sitharaman is scheduled to present the Budget of 2026-27 in Parliament on Sunday, i.e., on February
1. This will mark her ninth consecutive Budget in the Parliament. The Budget serves as the union government’s economic roadmap, detailing resource allocation strategies to drive the nation's long-term growth.
Ahead of the budget presentation, there are various key sectors that are under focus. One of the major sectors is the Railway. This year, under the Budget 2026, the railway is expected to get a major boost. Sources told ET Now that expectations are high for a boost in the railway sector, as in the last three years, there hasn’t been any significant increase seen in the railway budget. However, this year, at least a slight increase, that is, a single-digit growth, is likely to take place. Here are the highlights.
Railway budget expectations 2026: What could be special for Indian Railways in Union Budget?
Some of the key focus areas expected or hoped for in the 2026 budget include:
- Increased capital allocation for infrastructure. This can help expand capacity and connectivity.
- Investment in safety systems and modern technology to reduce accidents and improve reliability.
- Discussions around logistics cost reduction to make rail freight more competitive and efficient.
Expected rise in railway capital allocation: In terms of estimates and projections, the railway budget is expected to be around Rs 2.72 lakh crore, and this is the assumption, according to the ET Now source.
Focus on capacity expansion: Talking about where this spending might be directed or what the key focus areas could be, the first major focus is likely to be on increasing capacity.
In one form or another, the government is likely to channel a significant portion of this expenditure toward increasing capacity across critical sectors. This could involve investments in infrastructure, manufacturing capabilities, and supply-side enhancements aimed at addressing existing bottlenecks and supporting long-term growth.
Focus on modern infrastructure & safety: The budget is likely to emphasise rail infrastructure modernisation, safety systems (including upgrades like automatic protection systems), electrification, and rolling stock improvement — all key to faster and more efficient rail operations.
Focus on reducing logistics costs: Logistics costs in railway transport comprise all expenses involved in moving goods by rail, including freight rates, loading/unloading, terminal handling, and inventory holding costs
It is also widely believed that the government will place strong emphasis on reducing logistics costs. Despite ongoing reforms, logistics expenses in India, particularly those related to railways, remain significantly higher than those of global peers.
As a result, policy focus is likely to centre on identifying avenues for cost rationalisation and efficiency improvements.
Measures aimed at lowering these costs could help make rail transport more competitive and encourage greater adoption by companies across sectors.
