Union Budget 2026: Railways & the budget - Does funding always go up?

As anticipation builds across India's economy for the Union Budget 2026, key stakeholder expectations are taking centre stage. Finance Minister Nirmala Sitharaman will unveil the same this Sunday, February 1, in the Parliament.

Amongst uncertainties, one sector remains of standard importance. The Union Budget each year allocates big numbers to the Railways sector. This one sector is central to the Indian economy and remains one of the most closely watched sectors in every Union Budget.

From daily commuters to investors and policymakers, everyone wants to know how much the government is spending on Indian Railways and whether that allocation is rising every year.

How much has 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. 

Does railway allocation increase every single year?

While the overall direction has been upward, year-to-year increases are not always uniform. Some years see large hikes, while others see stable or modest increases. The size of the allocation depends on the overall fiscal space available, economic conditions, and the progress of ongoing railway projects. 

Main focus of railway funding in Budget 2026

In the Union Budget 2026, railway funding is expected to focus on consolidation and modernisation rather than expansion at any cost. Priority areas include completing ongoing infrastructure projects, strengthening safety systems like Kavach, boosting freight efficiency, and improving passenger experience through modern stations and trains.

The emphasis is likely to remain on quality, speed, and reliability rather than just increasing the number of new announcements. These steps are in line with Viksit Bharat 2047.

How does railway allocation impact the Indian Economy

Railway investment has a strong economic impact. It reduces logistics costs for businesses, improves the movement of goods and people, creates large-scale employment, and boosts regional connectivity & development. That is why railways remain a priority even in years of fiscal tightening.