Budget 2026: Indian Railways to see record capex of ₹2.99 trillion in FY27

Union Budget for 2026-27 lines up new high-speed rails, freight corridor

Amid the government’s focus on railway infrastructure, Finance Minister Nirmala Sitharaman on Sunday earmarked a record ₹2.99 trillion for the sector in the Union Budget for 2026-27 (FY27). This is 8 per cent higher than the ₹2.77 trillion in the FY26 revised estimates (RE).

 

For the current financial year, the transporter had budgeted revenue expenditure of ₹2.99 trillion, but is now expected to undershoot that target by ₹22,000 crore, according to the RE.

 

The Indian Railways’ capital expenditure, in the form of budgetary support from the government, is set to rise to ₹2.81 trillion in FY27, a 10 per cent increase over the FY26 RE of ₹2.55 trillion. Its investment from Extra Budgetary Resources (EBR) is seen rising to ₹12,000 crore next financial year, compared with the FY26 RE of ₹10,000 crore, according to the Budget documents.

 

On the revenue side, the Railways is budgeting for gross traffic receipts (GTRs) of ₹3.02 trillion in FY27, an 8.4 per cent increase over the FY26 RE of ₹2.78 trillion. The railway ministry had planned for the same level of GTRs at ₹3.02 trillion for the current financial year, but it is likely falling short of that target by ₹23,000 crore.

 

Its total passenger revenue is projected to rise 9 per cent to ₹87,300 crore in FY27, from ₹80,000 crore in the current financial year (RE).

 

Overall, the Indian Railways is budgeting for an operating ratio of 98.4 per cent for FY27 — it aims to spend ₹98.4 for every ₹100 it earns in 2026-27 — compared with a revised ratio of 98.82 per cent this financial year.

 

“In order to promote environmentally sustainable passenger systems, we will develop seven high-speed rail corridors between cities as ‘growth connectors’ — Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, Varanasi-Siliguri,” Sitharaman said in her Budget speech.

 

The finance minister also proposed a new Dedicated Freight Corridor connecting Dankuni in the East to Surat in the West, calling it part of an environmentally sustainable cargo movement strategy.

 

Though the new freight corridor was announced, the allocation for the Dedicated Freight Corridor Corporation (DFCCIL) is estimated to come down from ₹4,370 crore in the RE for FY26 to ₹500 crore in FY27. The outlay for the National High Speed Rail Corporation (NHSRCL) is seen flat at ₹15,500 crore.

 

In her Budget speech, Sitharaman also announced that the government would soon launch a new scheme for the promotion of construction equipment, including tunnel-boring machines used for Metro line construction.

 

The Railways has avoided the commercial borrowing market for operational purposes for a few years, with the government focusing on debt management. With a frontloading of capital expenditure, the transporter has delivered better results on spending. As of December 2025, it had spent 80.54 per cent (around ₹2.03 trillion) of the total allotted capex for the current financial year.