The Indian Railways’ capex could increase by about 15% in FY27 to over Rs 3 lakh crore, senior official at railways ministry told FE. The increase will be substantial given that in FY26, the railways capex allocation will remain flat at Rs 2.62 lakh crore.
“Due to political compulsions and fiscal constraints, the capex could not be increased in FY26. In a bid to boost consumption, the government had to loosed its purse strings by exempting income tax up to Rs 12 lakh. But the government’s larger goal of reducing the overall logistics costs will require rapid expansion of rail network and modernisation,” said the official.
As per the official, the key investment areas for railways include network infrastructure, rolling stock, safety, and station redevelopment. In addition, the railways is working on new projects such as bullet train, hydrogen trains, and Hyperloop as well. The work on these new projects will likely speed up from FY26 onwards, the official said.
For instance, the addition of locomotives, wagons and coaches is set to grow in the near future. In the case of coaches, the railways has ramped up production from 3,731 coaches in FY13 to 6,550 in FY24 and plans to add 8,000 every year, said a latest note from Elara Capital. Similarly, the production of wagons has tripled in the past 10 years, with plans to add over 30,000 wagons every year. “Railways is also looking at ramping up electronic interlocking at stations and automatic block signaling,” said the Elara note.
Similarly, passenger safety remains at the forefront for railways, and the next phase of Kavach, an indigenously developed automatic train protection system, will require large investments. For instance, the railways ministry has invited bids for track side works for around 15,000 route km in addition to finalising the contracts for equipping Kavach in 10,000 locomotives. Out of 15,000 route kms, works for 1865 route kms have already been awarded, railways minister Ashwini Vaishnaw told Lok Sabha recently.
“The modernisation initiatives are gathering pace, which include bullet train project between Mumbai and Ahmedabad. Railways has also developed the hydrogen train, becoming the fifth country in the world to do so. The government is planning to introduce 35 such trains under the project,” said a railways expert.
