RVNL, Titagarh, Texmaco Rail: Railway stocks in spotlight in the run-up to Budget FY27; check what Economic Survey said

The Budget will be presented by the FM on Sunday, February 1, and market participants are eager to watch what the government has in store for this crucial sector of the economy.

Here is what Economic Survey 2025-26 said on the Railway sector

The Railway Ministry rationalised passenger fares on three occasions over the last five years, consequent to which the share of freight earnings in its total income declined gradually from 68% to 65% and is further expected to fall to 62%, according to the Economic Survey for the financial year 2025-26 tabled in Parliament on Thursday.

The Survey analysed the Railways' economic performance over the past financial year and presented an outlook for the upcoming fiscal year.

It focused on cross-subsidisation in railway traffic, under which the Railways earn profits from freight services but use them to offset losses from passenger and other services.

"Rationalising freight rates could improve revenue buoyancy, incentivise a modal shift of freight from roads to rail, and increase market share. This, in turn, would stimulate economic activity, green the transport sector, and decongest road space," it added.

According to the Survey, rail freight services, a 50% cost-effective cargo route compared to road transport, continue to play a critical role in supporting the bulk and long-distance movement of goods essential for core industrial activities.

"In FY-25, freight loading by Indian Railways exceeded 1.6 billion tonnes, witnessing a slight expansion over FY-24. However, it remains 12.5% higher than the average of FY21-FY24, signalling a healthy underlying momentum," the Survey said.

Economic Survey: Indigenisation framework suggested

The Economic Survey has suggested a tiered structure for enhancing indigenisation and reducing vulnerabilities in areas such as Railways, fertiliser inputs, pharma ingredients, magnets, and battery cells.

According to the Survey, the 'high urgency sectors', such as fertiliser inputs, oil, pulses, pharma ingredients, industrial chemicals, and telecom equipment, require near-term capability building to rapidly scale up domestic production.

Similarly, for sectors including Tunnel Boring Machines (TBMs), rail signalling and defence electronics, it said there is a need to build an ecosystem and talent pool.