Sun Feb 02 00:07:45 UTC 2025: ## Railway Stocks Tumble After Budget Cuts Capital Expenditure

**NEW DELHI** – The Indian Railways received a lower-than-expected budget allocation of Rs 2.55 lakh crore for the fiscal year 2025-26, causing railway stocks to plummet. This represents a decrease from the record Rs 2.62 lakh crore allocated in the interim budget for 2024-25. The lack of significant reforms also contributed to investor disappointment.

Shares of key railway companies experienced sharp declines following the announcement. IRCON fell over 6%, IRCTC dipped 3%, and IRFC dropped 5%. Market analysts had anticipated a much larger increase, with some predicting a 15-18% rise in budgetary support. The unchanged capital expenditure (capex) of Rs 2.52 lakh crore for FY26 further dampened investor sentiment. Analysts had hoped for a significant capex boost to support infrastructure upgrades and enhance safety.

Despite significant infrastructure progress over the past decade, including the commissioning of 31,180 track kilometers and the electrification of 41,655 route kilometers since 2014, the Indian Railways remains heavily reliant on government funding. While the ministry highlighted the allocation of funds to support industrial development at key nodes, the overall reduced allocation fell short of market expectations.

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