The government is also preparing to focus on increasing expenditure on infrastructure in the upcoming budget, which is expected to boost the economy and increase people’s consumption. This can also accelerate investment and economic activities.
New Delhi: Before the Union Budget 2025, the most discussed question is who will get more funds between railways and highways. Initial indications suggest that Railways may get more priority than the highway sector in the upcoming budget of Finance Minister Nirmala Sitharaman. The reason for this is the increasing number of railway-related projects, the fast pace of expenditure and the long-term logistics strategy of the government.
Railways may get record budget
According to media reports, a budget of around Rs 2.7 lakh crore may be allocated to Indian Railways in the next financial year. This will be more than Rs 2.5 lakh crore of the current financial year. Railway officials say the projects that have been approved in the last few years are now entering the second and third phases, where expenditure naturally increases. Capital expenditure (capex) of Railways mainly focuses on these areas:
- construction of new railway lines
- Multi-tracking of existing lines
- Complete electrification of the broad-gauge network
- Purchase of new trains, locomotives and wagons (rolling stock)
According to the data, the Railways has spent around 77% of its annual budget so far, indicating that the sector remains in need of funds.
Why limited growth is possible in the highway sector
On the other hand, the budget increase in the national highway sector may remain relatively limited. The reason is that huge investments have already been made in this sector in the last few years. Apart from this, the pace of approval for new highway projects has also slowed down. According to government figures,
- Target of 10,000 km highway projects was set by 2026
- But so far only about 2,000 km of projects have been approved
- Even in 2024-25, only 7,537 km projects were approved against the target of 10,000 km.
The Road Transport Ministry has spent about 68% of its budget so far. Officials believe that if the pace of project approval does not increase, then in the next financial year the highway sector may get funds only around the current level.
Government’s focus remains on total capex
The government’s policy is clear that economic growth should be accelerated by increasing expenditure on infrastructure. In the current financial year, the central government had increased the capex by 10% to Rs 11.2 lakh crore. Government capex between April and October registered a growth of 13%, reaching Rs 6.7 lakh crore. This strategy is being adopted at a time when private sector investment is relatively slow. The government believes that public investment will increase employment, increase income and boost demand and consumption.
In Budget 2025, attention can be given not only to railways and highways, but also to agriculture and rural infrastructure. Proposals to strengthen canals and irrigation networks are under consideration in some states, so that farming can get direct benefits.
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