The Budget has increased the Indian Railways’ capital expenditure (capex) to Rs 2.93 lakh crore in FY27, which is 10.5% higher than the revised estimates for FY26.
The higher outlay is on account of more allocation towards provident fund and pension, addition of new rail lines, doubling of existing lines, and appropriation to pension fund. Within Rs 2.93 lakh crore, the government is expecting to generate Rs 12,000 crore through public-private partnership (PPP) mode.
In her speech, the finance minister announced seven new high-speed rail corridors to boost connectivity between major cities such as Mumbai, Delhi, Bengaluru, Chennai, Hyderabad, Pune, Varanasi, and Siliguri. These high-speed rail projects will be in addition to the Mumbai-Ahmedabad bullet train project that will become operational by August 2027.
Sustainable Growth Connectors
“In order to promote environmentally sustainable passenger systems, we will develop seven high-speed rail corridors between cities as ‘growth connectors,” the FM said.
The FM also said that a new dedicated freight corridor (DFC) connecting Dankuni in West Bengal to Surat in Gujarat will also be constructed.
This project is part of the three DFCs – East Coast, East-West and North-South – for which the Dedicated Freight Corridor Corporation of India (DFCCIL) had submitted the detailed project report (DPR) with the railways ministry in 2024.
In December last year, the railways board held a series of meeting with DFCCIL officials to discuss the DPRs on the three proposed DFCs. It may be noted that the two existing DFC projects are now nearing completion with the last leg of about 100 kms on western DFC will be likely commissioned in March this year.
Industry Growth Outlook
“The budget reinforces railways as a central pillar of India’s infrastructure and logistics strategy. Today’s announcements will significantly enhance passenger mobility, freight efficiency and regional economic integration.
A capital outlay of over Rs 2.9 lakh crore, combined with large-scale investments in safety systems such as Kavach, capacity expansion through track doubling and new lines, and the rollout of Vande Bharat, Amrit Bharat and Namo Bharat trains, provides strong visibility for sustained demand across rolling stock, wagons and rail engineering solutions,” said Sudipta Mukherjee, managing director of Texmaco Rail & Engineering.