Union Budget 2026: New dedicated freight corridor between Dankuni and Surat

New Delhi: Union Finance Minister Nirmala Sitharaman on Sunday announced the building of a new dedicated freight corridor between Dankuni in West Bengal and Surat in Gujarat for movement of cargo.

“To promote environmentally sustainable movement of cargo, I propose to establish new Dedicated Freight Corridors connecting Dankuni in the East, to Surat in the West,” the Finance Minister said.

The minister allocated Rs 2,77,830 crore to the Ministry of Railways for capital expenditure in the financial year 2026–27, which is record high in railway history.

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.

Sitharaman also announced that the railways will build bullet trains connecting the following cities : Mumbai and Pune, Pune and Hyderabad, Hyderabad and Bengaluru, Hyderabad and Chennai, Chennai and Bengaluru, Delhi and Varanasi and Varanasi and Siliguri.

Railway Minister Ashwini Vaishnaw said these seven bullet train corridors require Rs 16 lakh crore investment and it will be indigenous technology used.

The Minister also said that a new dedicated freight corridor between Dankuni in West Bengal and Surat in Gujarat will join Western Corridor. This corridor will also connect Odisha, Chhattisgarh, and Madhya Pradesh.

At present, two dedicated freight corridors -- Eastern and Western -- are in operation covering several states and districts.

Vaishnaw said since the record budget allocation to railways, maximum funds will be spent on safety and modernization of infrastructure.

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 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.

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.

“The Finance Minister’s announcement of seven high-speed transport corridors is critical not just for capacity creation, but for enabling technology adoption through advanced signalling, traffic management and higher-spec rolling stock. Given their long gestation, success will hinge on access to long-term financing and appropriately structured moratoriums,.” Jagannarayan Padmanabhan, Senior Director & Global Head, Consulting, Crisil Intelligence said.