The government has raised capital spending on Indian Railways sharply in 2026–27, reinforcing its emphasis on asset creation and network capacity, even as operating costs and pension liabilities continue to strain the system’s finances. The net budgetary allocation for the Ministry of Railways in 2026–27 stands at Rs 2,81,377.32 crore, up from Rs 2,55,466.32 crore in the revised estimate for 2025–26. The increase is driven almost entirely by higher capital expenditure, while revenue expenditure remains broadly stable. Capital outlay for Indian Railways has been raised to Rs 2,77,830 crore in 2026–27, compared with Rs 2,52,000 crore the previous year. Revenue expenditure, by contrast, rises marginally to Rs 3,547.32 crore. Budget documents underline a continued policy preference for long-term asset creation over expansion of day-to-day operations.
Within capital expenditure, rolling stock remains the single largest component, with an allocation of Rs 52,108.73 crore, up from Rs 50,007.77 crore in the revised estimate. Spending on leased assets, largely routed through the Indian Railway Finance Corporation, rises sharply to Rs 39,650 crore, reflecting higher reliance on extra-budgetary financing.
