Union Budget 2026: Does railways spending match its ambitious project pipeline?

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026 on Sunday, February 1, at 11 AM. This annual financial blueprint outlines how it plans to raise revenue and allocate spending in the year ahead. Presented in Parliament, it reflects the state of the economy and the government’s policy priorities.

Railways are the lifeline of India’s economy, connecting millions of people and businesses every day. Each Union Budget brings attention to railway allocations, sparking questions about whether new train projects, such as Vande Bharat or Amrit Bharat services, are part of the funding.

Railway allocations are divided into capital expenditure and revenue expenditure. Capital expenditure funds long-term investments like new trains, track expansion, electrification, signalling systems, and maintenance depots. Most new train projects fall under this category.

Revenue expenditure, by contrast, covers operational costs such as salaries, fuel, and routine maintenance. This distinction ensures that new trains are not just added in isolation but as part of a broader plan to strengthen the rail network.

How much has the railways received in the past five years?

In Union Budget 2025-26, Indian Railways received an allocation of around ₹2.65 lakh crore, broadly in line with the previous year. This meant there was no sharp jump compared to Budget 2024-25, but the allocation remained at a historically high level. Budget 2023-24 recorded an allocation of ₹2.40 lakh crore.

This year saw a tremendous increase from the previous year's allocation of ₹1.4 lakh crore in FY 2022-23.  FY 2021-22 received a similar allocation of ₹1.7 lakh crore. Over a longer period, however, railway funding has increased significantly. A decade ago, annual allocations were well below ₹1 lakh crore. Today, they are more than double that amount, showing a clear long-term upward trend.

Infrastructure behind new trains

Launching a new train project covers numerous aspects. Tracks need upgrading for higher speeds, signalling and safety systems must be enhanced, stations must be modernized along with depots and power supplies. The focus of railway funding is thus on building an integrated system, ensuring trains run efficiently, safely, and on schedule.

Budget 2026: Key focus areas

In the Union Budget 2026, railway spending is expected to prioritise expanding semi-high-speed and premium trains like Vande Bharat, completing ongoing rolling stock projects, upgrading safety systems and signalling for faster,  safer operations, and modernising stations and maintenance depots. 

This approach ensures that new train projects are sustainable and long-term, rather than one-off additions.

Economic and social impact of new projects

Investments in new trains and supporting infrastructure have wide-ranging benefits such as reduced travel time and logistics costs for passengers and freight, job creation through manufacturing, construction, and maintenance, 
better regional connectivity and smoother operations, and an overall boost to economic productivity and efficiency.