Budget 2025: Railways gets a cut in paycheck

After a Budget that allocated a record Rs 2.62 lakh crore towards modernising the Indian Railways last year, Finance Minister Nirmala Sitharaman scaled the quantum back to Rs Rs 2.55 lakh crore this time around.

Rail stocks like RVNL, which had rallied in anticipation of a double-digit hike in railway capex in the last few days, fell up to 9% on Saturday. Shares of Ircon were trading 8% lower while Texmaco, IRFC, Tiatagarh Rail and Jupiter Wagons fell between 5-7% each.

The Gross Budgetary Support for 2024-25 was set at Rs 2,52,200 crore, a significant increase from the Rs 2,40,200 crore in 2023-24, and a substantial rise from Rs 28,174 crore in 2013-14.


Last year's budget also allocated additional funds to promote industrial development, focusing on infrastructure to support industrial clusters at strategic locations. Key nodes included Kopparthy on the Visakhapatnam-Chennai Industrial Corridor, Orvakal on the Hyderabad-Bengaluru Industrial Corridor in Andhra Pradesh, and Gaya on the Amritsar-Kolkata Industrial Corridor in Bihar.

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Over the last decade, Indian Railways has commissioned 31,180 track kilometers, reflecting a significant acceleration in track-laying activities. The pace has increased from 4 kilometers per day in 2014-15 to 14.54 kilometers per day in 2023-24.

Additionally, electrification of 41,655 Route Kilometers (RKMs) was achieved between 2014 and 2024, nearly doubling the 21,413 RKMs electrified before 2014.

The Railways recorded an all-time high freight loading of 1,588 million tonnes (MT) in FY 2023-24, a substantial increase from 1,095 MT in 2014-15.

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In addition to freight achievements, Indian Railways reported record total receipts of ₹2,56,093 crores for the year, generating a net revenue of Rs 3,260 crore.

Addressing the prime concern behind train accidents, India's Kavach, an Automatic Train Protection (ATP) system launched in 2020, has been enhancing rail safety through technology that automatically applies brakes when a loco pilot fails to act.

Deployed across 1,465 route kilometers and integrated into 144 locomotives, including Electric Multiple Unit (EMU) rakes on the South Central Railway, Kavach has significantly advanced India's railway infrastructure. The system's latest specification, Kavach 4.0, was approved by the Research Designs and Standards Organisation (RDSO) on July 16, 2024.

According to official figures, Rs 1,216.77 crore had been spent on the system by July 24, 2024, with an additional Rs 1,112.57 crore allocated for its implementation in the financial year 2024-25.

Railways rely on their own resources to cover their working expenses, which include salaries, pensions, and asset upkeep. The surplus that railways produce is insufficient to pay for their planned capital expenditures, which include building lines and buying wagons. Extra-budgetary funds and grants from the Central government are used to fund capital expenditures. In 2023-24, Indian Railways reported all-time high total receipts of Rs 2,56,093 crore and generated a Net Revenue of Rs 3,260 crore.