Union Budget 2026: Rail Sector Outlay Likely To Hit ₹2.65 Lakh Crore

With a key focus area of the upcoming union budget being infrastructure, including railways, MD, Jupiter Wagons Ltd, Vivek Lohia, noted the rail sector is entering a phase where execution and reform will matter as much as headline allocations.

"Based on recent trends, the rail outlay is expected to see a calibrated increase of around five percent, taking the overall allocation to approximately Rs 2.65 lakh crore, including extra-budgetary resources," he said.

Further, electrification nearing completion, capital deployment is likely to be redirected toward easing congestion through new lines, gauge conversion, track doubling, and the expansion of Dedicated Freight Corridors and economic corridors linked to ports and mineral clusters.

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The reform agenda’s focus on faster adoption of artificial intelligence and advanced technologies for safety, predictive maintenance, and train operations is particularly encouraging, as it reflects a shift from asset creation alone to measurable performance outcomes.

“From an industry standpoint, continued capital support, regulatory simplification, deeper private sector involvement, and a more enabling framework for public-private partnerships will determine how effectively policy intent translates into on-ground execution. The forthcoming Budget should therefore focus on converting reform intent into projects that directly reduce congestion and lift operating efficiency across the rail network,” Lohia said. 

Meanwhile, the railways sector is regaining its share in freight transportation, recently estimated at about 29%. Under the National Rail Plan, Indian Railways has set an ambitious target of 3,000 million tonnes of originating freight loading by 2030 and raising its modal share to around 45 per cent by 2045.