THE Indian government has underscored its commitment to developing rail infrastructure by allocating Rs 2.93 trillion ($US 32.2bn) for capital expenditure in its 2026-27 budget. Indian Railways (IR) will receive its highest-ever total allocation of Rs 2.78 trillion.
Giving her budget speech in the lower house of Parliament on February 1, finance minister, Nirmala Sitharaman, announced that seven new high-speed lines will be built to complement India’s first line, under construction between Mumbai and Ahmedabad. The new high-speed lines are:
- Mumbai - Pune
- Pune - Hyderabad
- Hyderabad - Bengaluru
- Hyderabad - Chennai
- Chennai - Bengaluru
- Delhi - Varanasi, and
- Varanasi - Siliguri.
In a statement, the National High Speed Rail Corporation (NHSRCL) said detailed project reports (DPR) for six new high-speed lines have already been submitted to the Ministry of Railways. Initial surveying work for Varanasi - Siliguri is likely to begin later this year.
In addition, a new 2052km Dedicated Freight Corridor (DFC) has been proposed to connect Dankuni in West Bengal with Surat in Gujarat state. There is no official confirmation that a DPR has been completed for this project, also serving the states of Odisha, Chhattisgarh, Madhya Pradesh and Maharashtra, and connecting with the existing Western DFC.
Safety improvements
Projects to improve safety at IR have been allocated Rs 1.2 trillion in 2026-27, including improved track maintenance, new locomotives, coaches and wagons, and accelerating the deployment of the domestically-developed Kavach automatic train protection (ATP) system. Similar to ETCS Level 2, Kavach is due to be deployed on 18,000km of track in 2026-27.
The budget allocation for track renewals in 2026-27 has declined by approximately 10% compared with the year before, while funding for public-sector undertakings, production units, customer amenities and staff has been kept at the same level. The allocations for new line construction and track doubling have witnessed a spike, while the provision for rolling stock production has increased by around 3%.
However, IR failed to meet its revenue targets in 2025-26, with passenger revenue approximately one-third below budgetary targets. Freight revenue was around half the projected figure, with revenue growth of only 4% last recorded in 2025-26.
“Even with a higher allocation, IR can only be expected to meet the targets it had set itself for 2025-26,” says former IR general manager, Sushil Kumar Luthra.
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