Capex-led push to modernise rail network, expand capacity and improve passenger services
The government on Sunday allocated ₹ 2.81 lakh crore to the Ministry of Railways in the Union Budget 2026, signalling continued focus on railway infrastructure, capacity expansion, and passenger safety.
In the previous budget for FY26, the Railways had received a total allocation of ₹2.55 lakh crore, including ₹2.52 lakh crore towards capital expenditure and ₹0.03 lakh crore under revenue support and other heads, according to budget documents.
For FY27, the allocation for Railways has been increased to ₹2.81 lakh crore, reflecting the government’s emphasis on using rail infrastructure as a key driver of economic growth and logistics efficiency.
Capital expenditure continues to form the bulk of railway spending. In FY26, capex for Railways stood at ₹2.52 lakh crore, funding projects such as new lines, doubling and electrification of tracks, station redevelopment, rolling stock procurement, and safety upgrades. For FY27, railway capex has been pegged at ₹ 2.78 lakh crore.
The sustained investment push is aimed at improving freight movement, reducing logistics costs, decongesting busy corridors, and enhancing passenger experience through modern trains and upgraded stations.
Over the past few years, Railways has emerged as one of the largest recipients of government capital expenditure, with policymakers arguing that high rail capex has strong multiplier effects on steel, cement, manufacturing, and employment.
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