Budget 2026: Seven New High-Speed Rail Corridors Announced as Capex Push Continues
In a significant move to bolster India's infrastructure, Finance Minister Nirmala Sitharaman has announced the development of seven new high-speed rail corridors as part of the Union Budget 2026. This announcement aligns with the government's continued emphasis on higher capital expenditure, with a substantial allocation of Rs 12.2 lakh crore for the financial year 2026-27 (FY27).
Enhanced Capital Expenditure Allocation
The capital expenditure allocation for FY27 marks an increase of approximately 9% from the previous year's allocation of Rs 11.21 lakh crore for FY26. This sustained upward trajectory in public capital expenditure has been a hallmark of India's growth strategy since FY15, gaining further momentum in recent years. The government's focus on infrastructure investment is driven by its high multiplier effects, with the Economic Survey for 2025-26 indicating that for every rupee spent on infrastructure, GDP increases by Rs 2.5 to Rs 3.5.
New High-Speed Rail Corridors as Growth Connectors
During her Budget speech, Sitharaman outlined the seven high-speed rail corridors that will serve as "growth connectors" across the country. These corridors are designed to enhance connectivity between major cities and include:
- Mumbai-Pune
- Pune-Hyderabad
- Hyderabad-Bengaluru
- Hyderabad-Chennai
- Chennai-Bengaluru
- Delhi-Siliguri
These projects aim to create an environmentally sustainable transportation system, complementing India's ongoing first high-speed rail corridor, the bullet train project between Mumbai and Ahmedabad. The first stretch of this project, Surat-Billimora, is scheduled to be operational by August 15, 2027, with the entire corridor expected to be fully operational by 2029.
Railways and Roads: Key Drivers of Infrastructure
The Railways sector remains a pivotal component of the government's capex push. In addition to the high-speed rail announcements, Sitharaman also revealed plans for new Dedicated Freight Corridors connecting Dankuni in the East to Surat in the West. Furthermore, the government aims to operationalize 20 new National Waterways over the next five years, starting with NW-5 in Odisha to connect mineral-rich areas and industrial centers to ports.
The roads and highways sector continues to be a primary driver alongside Railways, accounting for more than 50% of the Centre's total capex in the previous financial year. In FY 2024-25, the total capex for road transport and highways was Rs. 2.85 lakh crore, while Railways received Rs. 2.52 lakh crore, contributing to an overall capex of Rs 10.52 lakh crore during that period.
Historical Context and Challenges
A major shift in India's infrastructure investment began after the government started increasing the capex budget. Between FY19 and FY22, capex increased by 92%, from Rs 3.07 lakh crore to Rs 5.92 lakh crore. This momentum has been sustained, with the capex outlay for FY26 rising to Rs 11.21 lakh crore.
However, high-speed rail projects are not without challenges. They are both cost and time-intensive, as evidenced by the first bullet train project, whose cost has nearly doubled from an initial estimate of Rs 1.08 lakh crore to Rs 1.98 lakh crore. Delays, including those due to land acquisition issues and the Covid-19 pandemic, have also impacted timelines.
Despite these hurdles, the government's commitment to large-scale investments across roads, railways, ports, power, aviation, and digital infrastructure is expected to strengthen connectivity, expand capacity, and improve logistics efficiency, thereby generating strong multiplier effects for growth and productivity in the Indian economy.
