India’s 2025-26 Union Budget delivered a significant blow to expectations surrounding the Indian Railways, maintaining a status quo that disappointed investors and analysts alike. The capital expenditure (CAPEX) for the national rail network remained unchanged for the second consecutive year, pegged at ₹2.52 lakh crore. This figure, revealed in the budget documents released following Finance Minister Nirmala Sitharaman’s presentation, was notably absent from her speech, highlighting a lack of emphasis on the sector’s crucial role in national development.

The stagnant CAPEX allocation underscores a concerning trend. While the budget prioritizes safety improvements and continued electrification projects—vital for modernizing the aging infrastructure—the lack of significant investment raises questions about the government’s long-term vision for the Indian Railways.

The allocated funds will continue to be channelled into track construction, wagon and train manufacturing, signalling upgrades, and station development, all essential components of a robust and efficient rail system. However, the absence of substantial new investments hampers the potential for expansion and improvement beyond these essential maintenance and upgrade projects.

Furthermore, the internal and extra-budgetary resources (IEBR) for the railways also experienced a dramatic downturn. At ₹13,000 crore, the IEBR represents a stark contrast to the ₹52,783 crore allocated in 2023-24, indicating a significant reduction in funding from alternative sources. This reliance on budgetary support alone restricts the railways’ ability to undertake ambitious expansion projects and modernization initiatives.

The market reacted swiftly and negatively to the budget’s conservative approach. Shares in railway-related companies, including IRCON, IRCTC, and IRFC, plummeted over six per cent following the announcement. This demonstrates a clear lack of confidence among investors who had anticipated reforms and increased investment in the sector.

The absence of any major policy changes or structural reforms further fueled the negative sentiment. The budget’s failure to address the sector’s challenges and capitalize on its immense potential represents a lost opportunity for accelerated growth and modernization. The unchanged budget leaves the Indian Railways facing significant hurdles in its quest to become a truly world-class transportation network.

Former Finance Minister Yashwant Sinha expressed scepticism about the income tax concessions proposed in the Union Budget, stating that they would have “limited benefits.” He argued that a reduction in Goods and Services Tax (GST) would have been more effective in boosting consumption and benefiting the markets.

Speaking to PTI, Sinha highlighted that only around 6 crore people would benefit from the income tax concessions, which he described as “meagre” for a large economy like India.

Sinha noted that while the middle class, particularly income taxpayers, would gain from the budget, the overall impact on the markets would be minimal. “If a concession had been given in GST, it would have benefitted the markets and increased consumption. The income tax concession, however, will have limited benefits. I don’t think the markets will gain significantly from this,” he said.

He also observed that in his hometown of Hazaribagh, there was no noticeable excitement about the budget, as people lacked the financial capacity to spend. “The markets here lack sheen because people don’t have money to spend,” he added.

Yashwant Sinha, who served as Finance Minister under former Prime Minister Atal Bihari Vajpayee from 1998 to 2002, is credited with several landmark decisions during his tenure. He introduced significant tax reforms aimed at simplifying the tax structure and authorized funding for the National Highway Authority, which laid the foundation for the expansion and modernization of India’s road infrastructure.

Sinha also introduced the Fiscal Responsibility and Budget Management (FRBM) Act in 2000, which institutionalized financial discipline and aimed to reduce fiscal deficits.

In addition to his economic reforms, Sinha made a notable change to the tradition of budget presentations. Breaking a 53-year-old practice, he shifted the timing of the Union Budget presentation from 5 pm to 11 am, aligning it more closely with Indian parliamentary convenience.

Now a leader of the Trinamool Congress, Sinha’s critique of the current budget reflects his deep understanding of economic policies and their practical implications. While acknowledging the benefits for the middle class, he emphasized the need for broader measures, such as GST concessions, to stimulate consumption and market growth in a more inclusive manner.

Bihar Chief Minister Nitish Kumar on Saturday praised the Union Budget 2025-26, describing it as “positive” and beneficial for accelerating the development of Bihar. Kumar, whose JD(U) is a key ally of the BJP-led NDA government at the Centre, expressed his gratitude to Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for the budget proposals.

In a detailed statement, the longest-serving Chief Minister of Bihar highlighted several key announcements that would directly impact the state’s growth and development.

Kumar welcomed the proposal to establish a “Makhana Board,” which he said would boost the cultivation, processing, and marketing of foxnuts, a crop for which Bihar is widely known.

He also lauded the proposal for greenfield airports in the state, stating that improved air connectivity would not only meet future demands but also enhance international flight operations, thereby boosting economic growth. “Greenfield airports will address the state’s future needs and improve air connectivity, paving the way for more international flights,” he said.

The Chief Minister also appreciated the decision to expand the capacity of IIT-Patna, emphasizing that it would elevate the standards of technical education in Bihar. Additionally, he noted that the revised income tax slabs, which exempt individuals earning up to Rs 12 lakh annually, would provide significant relief to the middle class. Kumar also highlighted the increased loan limit on Kisan Credit Cards from Rs 3 lakh to Rs 5 lakh, which he said would benefit farmers.

Other budget provisions that Kumar commended included the expansion of the National Institute of Food Technology, Entrepreneurship, and Management in Bihar, which he said would create skill development, entrepreneurship, and employment opportunities for the youth. He also welcomed the enhanced credit guarantee cover for micro-enterprises under the MSME sector, noting that it would generate more employment opportunities.

Kumar concluded by thanking PM Modi and Finance Minister Sitharaman for presenting a “progressive and forward-looking” budget. He stated that the announcements made for Bihar would accelerate the state’s development and benefit various sections of society, including farmers, youth, and the middle class. “This budget is positive and welcome. It reflects the Central Government’s commitment to the development of Bihar and the nation,” he said.