New Delhi, Nov. 19 -- Budgetary support for the Indian Railways is poised to hit a new high in 2026-27 as the government prepares an ambitious plan to upgrade the national transporter with faster, modern trains and better safety systems, two people aware of the matter told Mint. Capital expenditure is expected to rise about 12% next year to roughly Rs.2.76 trillion, which would be the highest-ever allocation for the Indian Railways, the people said.

Indian Railways operates with a two-pronged financial structure: its capex is primarily funded by the Union budget, while its operational expenses are mostly met through its own internal revenues.

The planned increase comes on the heels of unusually rapid spending this year, with the railway...