Indian Railways may seek additional funds from the Centre to maintain its spending on expanding the rail network, the first instance in many years where it will not only use up its entire budgetary funds before the end of a fiscal year but also seek additional resources to complete capital projects.
Railways has been in a spending spree in 2025-26, having already exhausted ₹1.6 trillion, over 65% of its record budgetary allocation of ₹2.52 trillion in the first seven months. This is the highest mid-year utilization ever achieved by the national transporter, according to two persons close to the development.
Although its 2024-25 capex was the same as 2025-26 at ₹2.52 trillion, it spent approximately ₹1.25 trillion, or 50%, during the same period.
At this rate, it will exhaust its entire budgetary funds well before the end of the fiscal year, thereby necessitating additional resources under the demand for grant mechanism during the last quarter, the first person said.
Additional support may be required to aid the production of more Vande Bharat trains, accelerate work on high-speed railways, Kavach installation, and strengthen the signalling system. Also, a major portion may go towards capacity augmentation, including network expansion and decongestion efforts, to improve speed and the last-mile connectivity.
Queries sent to the ministry of railways remained unanswered until press time.
Kavach and Vande Bharat
“Disproportionately high spending in the first half of the fiscal year is unusual. In the absence of adequate data in the public domain, it is difficult to analyse. However, capital-intensive programmes such as the indigenously developed automatic train protection system Kavach and Vande Bharat trains reaching the execution stage could be one of the reasons for the spending spike," said Subodh Kumar Jain, sector expert and former board member for engineering at Indian Railways.
"Ahmedabad-Mumbai high-speed corridor is also in full swing now, contributing to the increased expenditure. So far, for railways, the main expenses are being made on rolling stock and Kavach installation. The rest of the expenditure appears to be following the usual pattern with minimal growth,” he added.
The national transporter has used ₹1,42,487 crore, or 56.5%, of the total budgetary grants within the first six months, according to official railways ministry data.
Network expansion
The largest share of the spending has gone towards projects that increase network capacity, such as new railway lines, track doubling, gauge conversion, electrification, and the development of metropolitan transport. Here, in the first six months, Railways spent a total of ₹49,001 crore, 45% of the annual budget for this segment.
Next highest Railway spending of ₹25,948 crore has gone towards procuring and producing modern locomotives, coaches (including Vande Bharat trains), and wagons. This represented 46% of the allocated budget for rolling stock.
Safety is also a focus area, where Railways has spent ₹22,286 crore, 56% of the allocation, during the period. Funds were utilized for track renewals, road overbridges, level crossings, and the expansion of Kavach.
A sum of ₹5,863 crore, 49% of the allocation, has been spent on enhancing consumer amenities—modernizing stations, improving sanitation facilities, and upgrading waiting areas.
In other categories, such as inventory, research, computerisation, and miscellaneous capex, the ministry spent ₹2,034 crore, amounting to 60% of its annual outlay.