Cabinet Approves ₹13,041 Crore Rail and Highway Projects Across Five States

NEW DELHI — The Union Cabinet on Thursday approved a ₹13,041 crore package for rail and highway projects spanning five states, aiming to ease freight congestion on key corridors and improve road connectivity in under‑served regions. The package includes three rail projects worth ₹10,783 crore and highway works valued at ₹2,258 crore, officials said.

Rail expansion targets capacity bottlenecks

The rail component focuses on upgrading existing lines and adding new tracks on routes that are approaching full capacity. The three projects – slated for West Bengal, Odisha and Jharkhand – will add 1,200 kilometres of double‑track, modern signalling and dedicated freight corridors. The Ministry of Railways estimates the upgrades will raise freight handling capacity by 25 percent and cut transit times on the Howrah‑Mumbai and Howrah‑Delhi corridors by up to six hours.

Highway upgrades to improve regional connectivity

Highway works, covering a total of 1,050 kilometres, will involve widening national highways to four lanes, constructing bypasses around congested towns and installing intelligent traffic‑management systems. The projects are spread across the same three states plus Karnataka and Tamil Nadu, linking industrial clusters to ports and inland logistics hubs. The Ministry of Road Transport and Highways projects are expected to generate 12,000 jobs during construction and reduce average travel time on the Kolkata‑Bhubaneswar stretch by 30 percent.

Cabinet sources said the combined investment reflects the government’s “infrastructure push” announced in the 2026‑27 budget, which earmarked ₹1.2 trillion for transport development. The rail and highway allocations together represent 1.1 percent of the total fiscal outlay for the year.

Analysts note that the rail projects come as freight volumes on India’s main corridors have risen 12 percent year‑on‑year, pushing several lines to 95 percent utilisation. “Without additional capacity, the logistics cost premium will erode the competitiveness of Indian manufacturers,” said Ramesh Sharma, senior fellow at the Centre for Policy Research.

State governments will co‑fund a portion of the highway works, with each of the five states contributing between 10 percent and 15 percent of the total highway cost, according to the inter‑governmental agreement signed after the cabinet meeting. The remaining funds will be drawn from the central budget and a dedicated infrastructure loan programme.

Implementation is slated to begin in Q4 2026, with the first rail segment expected to be operational by March 2028. The Ministry of Finance has cleared the necessary budgetary provisions, and the projects will be monitored by a joint steering committee comprising officials from the rail, road and finance ministries.