Budget 2025 may prioritize Railways over Highways, says Nuvama Report

New Delhi [India], January 27 (ANI): The upcoming Union Budget for 2025-26 is expected to focus more on the railways sector than highways, according to a report by Nuvama. This marks a significant shift in infrastructure priorities, with railways likely to receive increased budgetary allocations.

In the previous financial year (FY24), the highways sector received an allocation of Rs 2.70 lakh crore. However, the report highlighted that the forthcoming budget is set to lean more in favour of railways, which is gradually receiving allocations at par with highways.

The report said, “For the previous FY24, an allocation of INR2.70 lakh crore was made for the highways sector. In the forthcoming budget, the number is expected to tilt more in favour of railways”.

In last budget for FY25, railways were allotted a record-high budget of Rs 2.5 lakh crore, compared to Rs 2.4 lakh crore in FY24, which was nine times the allocation made in 2013-14. On the other hand, the highways sector saw a budgetary outlay of Rs 2.78 lakh crore for FY25.

The report emphasized the environmental and logistical benefits of railways over roads. It stated that a single freight train can replace hundreds of trucks, and studies show that moving freight by rail can cut greenhouse gas emissions by up to 75 per cent.

Despite being the fourth-largest railway network in the world, India’s rail share in freight transportation has been declining over the decades.

Between 1950-51 and 2021-22, Indian Railways expanded its running track length from 51,000 km to over 102,000 km.

However, the share of rail in freight transportation dropped from 85 per cent in 1951 to 60 per cent in 1991, and further to just 27 per cent-28 per cent in 2022.

Currently, about 70 per cent of freight movement relies on roads, with trucks consuming more than half of the country’s petrol and diesel.

The growth of the road network, which doubled over the past decade to 150,000 km of national highways, has further tilted the balance. A lack of dedicated freight corridors and robust rail connectivity to non-major ports has added to the dependence on trucks.

However, the government is addressing these challenges, focusing on improving rail infrastructure to lower logistics costs and make freight transportation more efficient.

This shift in focus is expected to enhance railways’ role in freight transport, promoting a more sustainable and cost-effective logistics ecosystem.