Union Budget 2024 Expectations: Railways Eyes Further Boost In Budget Allocation

Interim Budget 2024: “This allocation is over nine times the amount earmarked in the financial year 2013-14,” said FM Nirmala Sitharaman during her Union Budget speech for the fiscal year 2023-24

The Indian Railways received an allocation of Rs 2.4 lakh crore in the national budget during the current fiscal year. This marked the highest-ever allocation for the national transporter, maintaining the trend set in the previous fiscal year, which saw a gross budgetary support of Rs 1.37 lakh crore in fiscal 2022-23. As India gears up for the budget announcement for the fiscal year 2024-25, industry experts believe that railways will yet again get a good hike in their budget allocation.

“This allocation is over nine times the amount earmarked in the financial year 2013-14,” said Finance Minister Nirmala Sitharaman during her Union Budget speech for the fiscal year 2023-24.

For this year's budget, analysts project that the budgetary allocation for railways is anticipated to reach unprecedented levels, exceeding Rs 3 lakh crore in the fiscal year 2024-25. This represents a substantial increase of 25 per cent compared to the previous year.

The year 2023-24 proved to be an eventful year for Indian Railways, marked by the inauguration of several new Vande Bharat trains nationwide and the introduction of the no-frills Amrit Bharat Express. However, the railways sector also faced a tragic incident with the deadly train disaster in Odisha, resulting in the loss of around 300 lives.

In light of this context, there is widespread anticipation that the Finance Minister will substantially augment the capital allocation for Indian Railways in the Interim Budget for the fiscal year 2024-25.  The increased allocation is intended to facilitate the modernisation of Indian Railways, encompassing faster trains, revamped railway stations, enhanced safety features, and the development of freight corridors.

According to analysts at Prabhudas Lilladher, Icra, and Elara Capital, there is potential for a significant increase in capital expenditure in the upcoming budget, given the heightened focus on modernising railways.

“We expect adequate allocations towards the infrastructure sectors such as roads, highways and railways in 2024-25. The defence outlay on research and development, and acquisitions may be enhanced further amid the government’s focus on encouraging the development and production of emerging technologies,” Icra said.

Elara Capital noted that the government has been prioritising capital spending, particularly for railways, roads, and defence. It anticipates that this emphasis will persist, although at a moderate pace.