In a Budget speech that fell short of expectations, Finance Minister Nirmala Sitharaman's address on July 23 made only a fleeting reference to the Indian Railways.
While speaking about Andhra Pradesh Reorganisation Act Sitharaman said that "Under the Act, for promoting industrial development, funds will be provided for essential infrastructure such as water, power, railways and roads in Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor and Orvakal node on Hyderabad-Bengaluru Industrial Corridor."
This brief mention was the only acknowledgment of the rail sector in the 2024-25 Budget, contrary to the anticipated focus on rail infrastructure and development.
The railway sector had anticipated significant announcements regarding budgetary allocations and infrastructure projects.
Industry stakeholders had hoped for a comprehensive roadmap detailing advancements in economic corridors, increased capital expenditure on new technologies, and enhanced safety measures to prevent accidents.
However, the Finance Minister’s speech did not address these expectations, maintaining the capital expenditure figures as outlined in the Interim Budget 2024.
In the Interim Budget for FY25, Sitharaman had allocated ₹2,52,200 crore as gross budgetary support for the railways, with an additional ₹10,000 crore from extra-budgetary resources.
She had also previously announced plans for three major economic corridors: an energy, mineral, and cement corridor, a port connectivity corridor, and a high traffic density corridor.
These corridors were expected to significantly impact rail infrastructure and development.
Despite these earlier announcements, the Budget did not include further details or new initiatives for railways.
This omission has been met with disappointment from the railway industry and investors.
Railway-related stocks, including Rail Vikas Nigam (RVNL), Indian Railway Finance Corporation (IRFC), Ircon International, RailTel Corporation of India, and Texmaco Rail & Engineering, experienced declines of 1-6 per cent following the Budget speech.
This followed a period of significant gains post the Interim Budget, where RVNL saw a 112 percent increase and other stocks also enjoyed substantial rises.
The limited mention of railways in the Budget has led to concerns about the future of the sector’s development and the pace of infrastructure projects.
Stakeholders had hoped for robust investments in new train models such as Vande Bharat and Vande Metro, progress on the Mumbai-Ahmedabad bullet train, and advancements in the Namo Bharat initiative.
The lack of new announcements has left many questioning the central government's commitment to rail infrastructure amid growing demands for modernisation and safety improvements.
While the Indian Railways had hoped for a more prominent spotlight in the 2024-25 Budget, the Finance Minister’s speech provided only a cursory mention.
This has left the sector and its investors apprehensive about future developments and investments.
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