Railways’ FY26 spending spurs electrification, new trains; what lies ahead in Budget 2026

The Ministry of Railways has reported substantial progress in utilising its budgetary allocation for the financial year 2025-26, especially in capacity augmentation and customer amenities. As of the end of December, 69 per cent of the Rs 1,09,238 crore allocated for capacity augmentation, totalling Rs 76,048 crore, has been expended. Investments in customer amenities also reflect high priority, with 80 per cent of the allotted funds, or Rs 9,575 crore, already spent. This level of fund utilisation highlights the ongoing efforts to modernise infrastructure and address increasing passenger demand.

The Railways has listed the operation of 164 Vande Bharat train services and 30 Amrit Bharat train services as evidence of sustained capital expenditure over the past decade. These initiatives underscore a commitment to expanding service capacity and improving the travel experience for passengers across the country. The continued rollout of new train services builds on previous investment strategies and aligns with national goals for faster, safer, and more comfortable travel.

"Targets for FY 2025-26 are also likely to be fully achieved," a Rail Ministry statement said. This outlook is supported by the current pace of expenditure and the breadth of ongoing projects, indicating that the Ministry’s infrastructural goals remain on schedule.

Key focus areas include the implementation of the Kavach automatic train protection system, now underway, and the electrification of over 99 per cent of the broad-gauge network. These projects form part of a wider set of works covering new railway lines, gauge conversion, track doubling, and substantial investments in public sector undertakings and metropolitan transport systems. Such comprehensive infrastructure works are designed to raise safety standards while improving the efficiency and reliability of the rail network.

Railway officials highlighted that these infrastructure and technology investments have led to marked improvements across multiple performance indicators. Upgrades in safety, operational capacity, and passenger comfort are evident as a result of focused capital allocation and efficient project execution. The upcoming inauguration of the Vande Bharat Sleeper train set has been noted as a highlight of these efforts.

"These initiatives have significantly improved speed, safety, and passenger comfort, while keeping rail travel affordable," the statement said adding the Vande Bharat Sleeper train set is ready for inauguration shortly, having the potential to transform long-distance rail travel.

The financial commitment to safety is apparent, with significant expenditure on automation and modernisation measures such as the Kavach system. Railways’ focus on safety complements its parallel investments in expanding and upgrading track infrastructure, ensuring safer journeys for all passengers.

The budget deployment and project execution strategy of Indian Railways aligns with broader industry standards and benchmarks. With ongoing electrification, new train launches, and automation projects, the sector continues to prioritise the passenger experience and operational excellence, keeping Indian Railways competitive among domestic transport providers.

Railway Budget 2026-27

Budgetary support for Indian Railways’ capital expenditure in FY27 is expected to rise marginally to touch around Rs 2.75 lakh crore, an increase of about 3.7% over the current year’s Budget Estimate, Financial Express reported. The government will also continue its policy of restricting the use of extra budgetary resources (EBR) to fund the railways’ investment needs.

Electrification of the rail network is nearing completion, with more than 99.2% of routes already covered. The remaining stretch of the 69,400 route-kilometre network is likely to be brought under electric traction soon. In Budget 2025-26, the Centre had set aside Rs 6,150 crore to accelerate work on track electrification.

Last year’s budget also allocated Rs 19,000 crore to the National High Speed Rail Corporation Limited, which is overseeing the Mumbai–Ahmedabad bullet train corridor. At the same time, spending on safety-related initiatives, across both revenue and capital heads, is estimated to touch Rs 1.17 lakh crore in 2025-26.

For Indian Railways, budgetary grants continue to be the backbone of its capital programme. These funds support the expansion of rail infrastructure through new lines and multi-tracking of busy routes, complete the electrification of the broad-gauge network, and finance the purchase of critical rolling stock, including locomotives, coaches and freight wagons.