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What to Expect from the Government’s Budget on Railways: Key Initiatives

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As the date for announcing the upcoming Railways Budget is getting closer (July 23), investors are getting more curious about its impact on the railways sector. After all, Indian Railways is one of the most important components of the country’s overall infrastructure.

So when the FM Nirmala Sitharaman presents the budget on July 23, what should be your budget expectations? Given the recent unfortunate accident of Kanchanjunga Express, it is expected that the budget will focus a lot on passenger safety.

The government has also been facing severe criticism for overcrowding in general coaches. Therefore, the budget is likely to improve the capacity of the Railways, especially for the masses.

The government led by Prime Minister Mr. Narendra Modi has earlier also focused a lot on the railways. For example, the budgetary allocation for Indian Railways was the highest ever in 2023-24. Therefore, in Budget 2024, the government is likely to spend a lot on the Railways through capital expenditure.

Mr. Modi has already expressed his support for expanding the network of Vande Bharat trains. That said, the government will have to pay attention not only to Vande Bharat trains but to the rest of the network as well.

Meanwhile, it is already reported that Vande Bharat trains cannot be run at their maximum speed because the Railways has not replaced tracks on any route of such trains.

Hence, the government may have to allocate funds for this purpose as well. The government has earlier said that it wants the whole issue of waiting lists to end in 5-6 years. For that to happen, the government will have to invest a lot in the Railways.

In the context of the railway sector, the expectations from the upcoming budget are high. It appears that the government will allocate significant funds for the railways. Let’s see what happens on July 23. Read this blog, as we’ll explain what to expect from the Railways Budget and which stocks to watch out for. In line with our motto #BudgetSimpleHai, we’ll explain all the nuances related to the union budget and railway sector simply.

Introduction to Budget 2024's Focus on Railways

1.In light of the recent unfortunate train accident of Kanchanjunga Express, the budget is likely to focus on passenger safety.

2.To increase passenger safety, the budget may allocate funds for train protection systems and mechanisation of maintenance operations.

3.To stop overcrowding in general compartments, the budget may focus on improving the capacity.

4.The budget may allocate significant funds for expanding the network of Vande Bharat trains.

5.Considerable allocations are likely to increase the number of trains and coaches so that waiting lists end in the next few years.

6.The government is likely to allocate more funds for creating high-speed corridors and economic corridors. Such initiatives will give a boost to industries.

#BudgetSimpleHai

To simplify this year's Budget and its impact on your life and investments, we bring you #BudgetSimpleHai!

 

Visit our website or follow our social handles for live updates on the Union Budget. Read in-depth reports, watch videos, and understand what's in store.

 

Kyunki Bajaj Broking ke saath, #BudgetSimpleHai!

Impact on Railways Stocks and Market Outlook

  1. It’s expected that the Railways Budget will allocate funds for capital expenditure, which means expansion.

  2. Any expansion is typically good for the railway sector because it means that firms that are supplying to the Indian Railways will gain more contracts. So, overall, the budget is likely to be positive for railways stocks.

  3. That said, it’s tough to say whether railway stocks will move up after the budget. The interim budget, which was presented earlier this year, had positive announcements for the railways sector.

  4. Consequently, many railway stocks have surged since then. For example, Titagarh Rail Systems has already risen by around 57% since February 1, 2024, when the interim budget was presented.

  5. Therefore, it’s tough to say whether stocks from the railway sector will further move after the Railways Budget is presented on July 23. The best thing to do is to wait and watch what the budget announcements are and then take action.

Conclusion

It is expected that the Upcoming Railways Budget 2024 will allocate more funds for capital expenditure. Therefore, companies supplying to Railways are likely to gain. However, many railway stocks have already risen a lot due to announcements made in the interim budget.

So, if you are an equity investor, the best thing to do is wait and watch out for the Railways Budget on July 23. Based on the union budget announcements, you should analyse which railway sector stocks will gain and then make investments.

Keep visiting Bajaj Broking’s website for all budget related updates. In this space, we’ll be decoding the budget and its impact on the Indian stock market, as we believe that #BudgetSimpleHai! You can read here about key predictions and expectations from the Union Budget 2024 and here about how the market is likely to react before and after the budget.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What is the significance of the government’s budget for the railways sector in 2024?

Answer Field

The Railways Budget will talk about how much the government intends to spend on  the Railways in this financial year. Besides, it will also talk about government policy. Hence, it’s important for the railways sector.

What key initiatives are expected to be announced for the railways in Budget 2024?

Answer Field

The budget is likely to focus on passenger safety, capacity expansion, increasing the reach of Vande Bharat trains, and eliminating the waiting lists as much as possible.

How might the budget announcements impact railway stocks and investments?

Answer Field

It’s tough to say as of now what will happen to railway stocks. Therefore, investors should watch out for budget announcements first and then take action.

Which are the top railway stocks investors should watch in 2024?

Answer Field

The top railway stocks to watch out for in 2024 are Titagarh Rail Systems, Texmaco Rail & Engineering, L&T Construction, Bharat Heavy Electricals, and Hind Rectifiers.

How can individuals track developments and announcements related to the railways sector post-budget?

Answer Field

Investors can check out the latest updates on news websites for this. They can even visit the websites of listed companies, which supply parts and components to the Indian Railways.

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