NEW DELHI: Indian Railways is on the cusp of a revolutionary growth phase with the allocation of its highest-ever capital expenditure in the Union Budget 2026-27, with a target of Rs 2.93 lakh crore.
This historic allocation reflects the government’s aggressive move towards providing high-speed connectivity services, increasing freight services, and ensuring better safety standards, which will place railways at the forefront of India’s economic development strategy.
The extent of the allocation is a testimony to the Centre’s continued focus on development through infrastructure, Railway minister Ashwini Vaishnaw informed.
The thrust is on developing network capacity, relieving congestion on saturated routes, upgrading rolling stock and stations, and comprehensively upgrading safety systems, he mentioned, adding, “This will help reduce the cost of logistics, make freight services more competitive, and provide faster, safer, and more comfortable journeys to passengers”, he said.
Listing the priorities of the Railway budget, Vaishnaw said that the government considers the railways to be a “growth engine” for a developed nation. “This historic capital expenditure will accelerate infrastructure development, improve safety outcomes, and facilitate faster, greener, and more efficient transportation across the country,” the minister said.
The highlight of the Budget remains the announcement of seven high-speed rail corridors, which are expected to act as growth connectors between major economic and urban hubs. The proposed corridors are Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri. These corridors will provide the framework for the future high-speed rail network in India, which will work towards reducing inter-city travel times significantly while also focusing on environmentally sustainable transport. In South India, the Chennai-Bengaluru-Hyderabad high-speed network will establish what the government calls a South High-Speed Triangle or Diamond.
Speaking at a press conference at Rail Bhawan, Vaishnaw said that the travel time between Chennai and Bengaluru would be cut to about 1 hour and 13 minutes, while the time between Bengaluru and Hyderabad would be about 2 hours. The time between Chennai and Hyderabad would be less than 3 hours, Vaishnaw said. “This high-speed network will prove to be a strong multiplier for Karnataka, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, and Puducherry,” the minister said. In western India, the proposed high-speed corridor between Mumbai and Pune is likely to reduce travel time by 48 minutes, thus seamlessly integrating the two cities into one economic zone.
Delhi-Varanasi high-speed corridor is expected to facilitate travel within 3 hours and 50 minutes. After Varanasi, the corridor will stretch from Patna to Siliguri in West Bengal, cutting the travel time between Varanasi and Siliguri by less than three hours. According to reports, this corridor will establish a new economic zone that covers Delhi, Uttar Pradesh, Bihar, and West Bengal.
Vaishnaw said that the seven high-speed corridors will have a cumulative length of nearly 4,000 km and are expected to attract investments of around Rs 16 lakh crore in the coming years. “These corridors will put the railways at the heart of the future mobility system in India,” he said.
Freight transport and logistics optimisation are the second key plank of the railway budgetary allocations. The Budget has announced a new 2,052 km Dedicated Freight Corridor from Dankuni in West Bengal to Surat in Gujarat, passing through Odisha, Chhattisgarh, Madhya Pradesh, and Maharashtra. The new corridor will connect with the existing Western Dedicated Freight Corridor, allowing smooth transportation of goods from the east to the ports on the west coast.
The rail minister further pointed out that the present Eastern and Western Dedicated Freight Corridors are already running close to saturation levels, with 400 freight trains plying on them every day. “To cater to the growing demand and facilitate industrial development, the need for new freight corridors has arisen,” he said, adding that the new east-west freight corridor will relieve congestion on existing routes and boost the country’s supply chain.
Safety remains the government’s number one priority in railway outlays. Almost Rs 1.20 lakh crore has been allocated solely for safety works in 2026-27. Vaishnaw said that the government has already achieved results in this area, with railway accidents declining by almost 95 per cent.
The safety-related expenditure would be focused on track renewal, enhanced maintenance of locomotives, wagons, and coaches, accelerated implementation of the Kavach automatic train protection system, installation of CCTV cameras at stations and in coaches, enhancement of overhead electrical systems, and station redevelopment with better passenger facilities.
According to the Budget papers, the total net expenditure on the Ministry of Railways during 2026-27 is Rs 2.81 lakh crore, after taking into account the internal receipts and recoveries. The revenue expenditure is estimated at Rs 3,547 crore, while the capital expenditure accounts for the outlay of Rs 2.78 lakh crore, thereby emphasising the government’s focus on creating assets rather than incurring expenditure.
Working expenses constitute the largest part of revenue expenditure. Even the staff expenditure alone is Rs 1.23 lakh crore. Office and contingent expenses are estimated at Rs 2,699 crore, making the total working expenses approximately Rs 1.26 lakh crore.
Other ordinary working expenses are estimated at Rs 1.74 lakh crore. This includes Rs 7,904 crore for diesel used in traction and Rs 25,183 crore for electricity used in traction, which marks the increasing trend of the railways’ use of electrified trains. Materials for repair and maintenance have been allocated Rs 11,219 crore, and contractual payments amount to Rs 15,157 crore. Lease and hire charges payable to institutions like the Indian Railway Finance Corporation have shown a sharp increase to Rs 35,130 crore.
Capital expenditure remains the driving force behind railway expenditure. A total capital outlay of Rs 2,77,830 crore has been allocated for 2026-27. New railway line projects have seen an allocation of Rs 36,722 crore, while gauge conversion schemes have received Rs 4,600 crore. Track doubling projects have been allocated Rs 37,750 crore, which will help reduce congestion on high-density routes.
Rolling stock remains an area of intense investment, with Rs 52,109 crore being allocated for locomotives, coaches, and wagons. Track renewal works have been allocated Rs 22,853 crore, signalling and telecom works Rs 7,500 crore, and electrification schemes Rs 5,000 crore. Passenger-related infrastructure has also been a focus area. Customer amenities have been allocated Rs 11,972 crore, and large amounts have been allocated for station redevelopment, workshops, and production units. Metropolitan and suburban transport schemes, including metro rail networks, have been allocated Rs 2,886 crore.
Another major element of capital expenditure is the investment made in public sector undertakings and joint ventures. The National High Speed Rail Corporation Limited has been allocated Rs 15,000 crore in 2026-27, and the Dedicated Freight Corridor Corporation of India has been allocated Rs 500 crore. The total investment in Indian Railways and its entities, including internal and extra-budgetary sources, is estimated to be Rs 2.93 lakh crore.
Vaishnaw also highlighted the country’s increasing technological prowess, saying that the propulsion systems developed and made in India are now being exported to foreign countries like the United States, Germany, France, Switzerland, and Spain. He also mentioned the record-breaking performance in infrastructure development, including the laying of 35,000 kilometres of new tracks, electrification of 47,000 kilometres, and electrification of
over 99.5 per cent of the broad gauge network.