Rail spending capped in cautious Indian budget

INDIA: Emphasising a continued focus on economic growth, the government has allocated Rs2·52tr for capital expenditure in the national rail network during the 2025-26 financial year starting on April 1.

This is the same as the allocation for 2024-25, despite earlier expectations that gross budgetary support for the Ministry of Railways could be increased to around Rs3tr, enabling a greater outlay on capacity expansion and modernisation programmes.

Presenting her eighth national budget on February 1, Finance Minister Nirmala Sitharaman explained that it reflected a slowing of the country’s economic growth rate to a four-year low.

‘As we complete the first quarter of the 21st century, continuing geopolitical headwinds suggest lower global economic growth over the medium term’, she explained. ‘This budget continues our government’s efforts to accelerate growth, secure inclusive development, invigorate private sector investments, uplift household sentiments, and enhance spending power of India’s rising middle class.’

Unlike previous years, the Finance Minister did not single out rail spending in her speech, focusing on the maritime and aviation, postal and warehousing sectors, as well as regional infrastructure development.

Finance Secretary Tuhin Kanta Pandey insisted that ‘we haven’t really deviated from the path of a capital expenditure push. There is actually a 17% increase over the revised estimates. We had in the past increase…