Infrastructure Boost: Railways and Highways Lead the Way

02 Feb, 2026

India is witnessing a major boost in its infrastructure development, with the Railways and highways emerging as primary drivers. According to the recent announcement by Union Finance Minister Nirmala Sitharaman, these two sectors will account for nearly 47% of the total capital expenditure allocation of Rs 12.2 lakh crore for the financial year 2026-27.

Specifically, Rs 2.94 lakh crore has been allocated for Road Transport and Highways, while Rs 2.78 lakh crore is earmarked for Railways. This investment is expected to significantly enhance infrastructure and connectivity across the country. The total capital expenditure for Railways, including Internal and Extra Budgetary Resources, stands at an impressive Rs 2.93 lakh crore.

Among the notable initiatives is the announcement of seven high-speed rail corridors and one dedicated freight corridor, aimed at accelerating the Bullet train project between Mumbai and Ahmedabad. This ambitious project has already achieved over 55% physical progress as of October 2025, showcasing the government's commitment to modernizing rail transport.

While there were no direct announcements regarding National Highways, a proposed scheme for enhancing Construction and Infrastructure Equipment (CIE) aims to strengthen domestic manufacturing of advanced construction tools. This initiative could revolutionize the construction industry, providing high-value equipment for various applications, including metro building and road construction.

The government's focus on infrastructure investment has been evident since it began increasing the capex budget. From FY19 to FY22, the capex rose by 92%, from Rs 3.07 lakh crore to Rs 5.92 lakh crore. This upward trend continued, with the capex outlay for FY26 revised to Rs 10.96 lakh crore. This momentum is crucial as it supports economic growth through enhanced infrastructure.

As per the Economic Survey for 2025-26, every rupee spent on infrastructure can increase GDP by Rs 2.5 to Rs 3.5, highlighting the significant multiplier effect of infrastructure investment on the economy.

With the recent capex push, the length of National Highways has risen by 61%, from 91,287 km in 2014 to 1.46 lakh km now. Similarly, the National High-Speed Corridors have expanded dramatically from just 93 km in 2014 to 3052 km today. This expansion reflects a broader commitment to improving transportation and logistics in India.

In Railways, capital outlays are directed towards new lines, doubling, multi-tracking, and safety enhancements. As of March 2025, the rail network has expanded to 69,439 route km, with ambitious plans to extend the network by an additional 3,500 km during FY26. The average commissioning rate of the railway network has more than doubled, indicating a focused effort to modernize and expand this vital sector.