Railways: FM Sitharaman allocates Rs 2.77 lakh crore for capital expenditure

NEW DELHI: Finance Minister Nirmala Sitharaman on Sunday allocated Rs 2,77,830 crore to the Ministry of Railways for capital expenditure in the financial year 2026–27.

The Budget allocation includes the construction of new lines and the purchase of locomotives, wagons, and coaches, among other works.

The ministry had received Rs 2,52,000 crore in FY 2025–26. The current allocation for the upcoming financial year is 10.25 per cent higher, making it the highest ever. Besides, the ministry will get Rs 15,000 crore from Extra Budgetary Resources, the document showed.

According to the Budget document, the railways’ total earnings are projected at Rs 3,85,733.33 crore, while expenditure is estimated at Rs 3,82,186.01 crore, resulting in a surplus of Rs 3,547.32 crore at the end of the financial year.

“Since the railways’ earnings are too meagre to fund asset creation and support new works, it receives funds from the government. Accordingly, the ministry has been allocated Rs 2,77,830 crore to undertake activities such as laying new lines, converting narrow gauge to broad gauge, and constructing double lines on single-line routes,” a railway official said.

The Budget document has earmarked funds from the Rs 2,77,830 crore allocation for various construction and asset creation projects. These include Rs 36,721.55 crore for new lines, Rs 4,600 crore for gauge conversion, Rs 37,750 crore for doubling, Rs 52,108.73 crore for rolling stock (locomotives, wagons, etc.), and Rs 7,500 crore for signalling and telecom, among others.

The allocation under the signalling and telecom head is significant as the automatic train protection system, Kavach, falls under this department. The ministry has laid strong emphasis on expanding Kavach coverage across the rail network.

The document also presents the actual earnings and expenditure of the railways in 2024–25. During the year, railways earned Rs 3,35,757.09 crore and spent Rs 3,32,440.64 crore, recording a surplus of Rs 3,316.45 crore. The budgetary allocation for the year stood at Rs 2,51,946.56 crore.

“As far as FY 2025–26 is concerned, the actual figures for earnings and expenditure will be available only after the financial year ends,” an official said, adding that largely earnings and expenses are on expected lines with minor changes.

Out of the total expenditures of the railways, the biggest share goes on paying pensions to its employees.

According to Budget documents, expenditure on pensions was Rs 58844.07 crore in 2024-25, which is expected to rise to Rs 74500 crore in 2026-27. (PTI)