The Union Budget 2026 has set aside ₹2.78 lakh crore for the railways, a 10.3% increase from last year’s ₹2.52 lakh crore. Additionally, ₹2.93 lakh crore has been allocated to the Ministry of Railways for total capital expenditure (capex).

Similarly, the government has proposed to allocate ₹3.09 lakh crore for the road transport and highways ministry, around 8% higher than the ₹2.87 lakh crore provided in the current financial year. While presenting the Union Budget, finance minister Nirmala Sitharaman proposed raising the allocation for the state-owned National Highways Authority of India (NHAI) to ₹1.87 lakh crore from ₹1.70 lakh crore last year.

According to a senior government official, NHAI plans to bring its debt down to below ₹2 lakh crore in the current financial year ending March.

The allocation will support the development of more highways and expressways at a time of rising interest rates and higher land costs.

7 new high-speed rail corridors

Under the new railway projects, the finance minister on Sunday announced that the government will develop the seven high-speed rail corridors aimed at improving connectivity and strengthening infrastructure across India.

“In order to promote environmentally sustainable passenger systems, we will develop seven high-speed rail corridors between cities as growth collectors,” FM Sitharaman announced. The seven corridors are:

• Mumbai to Pune

Commenting on the increase in allocation to railways, Suprio Banerjee, vice president & co-group head, ICRA, described it as a “healthy increase”.

“The gross budgetary support for the Ministry of Railways has witnessed a healthy increase of 10% to ₹2.78 lakh crore in FY2027 BE compared to ₹2.52 lakh crore in FY2026 RE. The allocation to railways represents nearly 23% of the overall capital expenditure of ₹12.2 lakh crore, which indicates the government’s strong focus on the sector. Track infrastructure, rolling stock, signaling and electrification, and customer amenities continue to dominate the allocations with a 64% share in FY2027 BE, and remain in line with the FY2026 trend. Development of seven high-speed corridors and addition of new dedicated freight corridor lines will increase the attractiveness and effectiveness of the railway sector on an overall basis,” he said.