Union Budget 2026: Railways capital outlay raised to Rs 2.81 lakh crore

The Indian Railways' capital expenditure spending has been raised to Rs 2.81 lakh crore for the financial year 2026-27, up 10 percent from the FY26 budget estimate of Rs 2.55 lakh crore, with thrust on safety and electrification.

• Railways capex for FY27 raised to Rs 2.81 lakh crore, up 10 percent from FY26
• Seven new high-speed rail corridors announced as growth connectors
• Focus on safety, electrification, and PPP models to boost rail infrastructure

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The Indian Railways' capital expenditure spending has been raised to Rs 2.81 lakh crore for the financial year 2026-27, up 10 percent from the FY26 budget estimate of Rs 2.55 lakh crore, with thrust on safety and electrification.

The ministry's internal and extra-budgetary resources (IEBR) have also been increased to Rs 15,000 crore in 2026-27 from Rs 13,000 crore in 2025-26. IEBR includes funds raised through various financing sources, including that through IRFC for capex deployment.

The annual expenditure will be funded through budgetary support of almost Rs 2.77 lakh crore in FY27, against a budgetary support of Rs 2.52 lakh crore for FY26, Budget documents show.

The money will be spent on building tracks, wagons, and trains, electrification, signalling and station development with focus on safety.

The railways needs funds for a number of projects, including laying of rail tracks, gauge conversion, electrification, and signalling, apart from improvement in rolling stocks.

Finance Minister Nirmala Sitharaman further announced development of seven high-speed rail corridors between cities as ‘growth connectors’ between Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri.

In FY26 the government inaugurated 13 projects and laid the foundation stone for 21 projects, collectively valued at over Rs 25,000 crore.

From 2014–25, the Modi government laid 34,428 km of new tracks at an average 8.57 km a day, more than twice the average daily commissioning (4.2 km/day) during the period 2009–14.

Indian Railways is undertaking a series of transformative infrastructure initiatives to enhance capacity, efficiency, and sustainability across the rail network. Key focus areas include the commissioning of dedicated freight corridors to decongest the conventional network, and promotion of Public-Private Partnership (PPP) models to supplement public investment.