Principal repayments rise to ₹24,853 crore in FY26, while greater Gross Budgetary Support is being used for railway infrastructure and rolling stock

New Delhi, August 7, 2026: Indian Railways has maintained a stable debt-servicing position in recent years, with principal repayments continuing to rise while the government increases Gross Budgetary Support (GBS) for infrastructure and rolling stock, reducing the railway network’s dependence on Extra-Budgetary Resources (EBR).

The latest figures released by the Ministry of Railways show that Indian Railways’ combined principal repayment and interest payment to the Indian Railway Finance Corporation (IRFC) and the Ministry of Finance stood at ₹46,538 crore in FY2025-26, compared with ₹28,702 crore in FY2021-22.

The government said debt servicing has remained stable over the last few years despite the financial impact of the Covid period.

Key Highlights

• Indian Railways paid ₹46,538 crore in principal and interest in FY2025-26.
• Principal repayment increased from ₹14,192 crore in FY2021-22 to ₹24,853 crore in FY2025-26.
• Interest payments stood at ₹21,685 crore in FY2025-26.
• Government support through Gross Budgetary Support is increasingly funding infrastructure and rolling stock.
• The shift is reducing dependence on Extra-Budgetary Resources for railway capital expenditure.
• IRFC finances railway rolling stock, infrastructure projects and leasing arrangements with Indian Railways.
• IRFC’s mandate also covers sectors linked to railways, including hotels and catering.

Principal Repayments Continue to Rise

The government’s data shows a consistent increase in principal repayments over the past five financial years.

Principal repayment increased by more than 75% between FY2021-22 and FY2025-26, according to the figures released by the government.

At the same time, interest payments increased from ₹14,510 crore to ₹21,685 crore over the same period.

Government Funding Reduces Dependence on EBR

A key part of the government’s financial strategy has been increasing Gross Budgetary Support for railway infrastructure and rolling stock.

According to the Ministry of Railways, infrastructure projects and rolling stock that were previously financed through Extra-Budgetary Resources are increasingly being supported through government budgetary funding.

This approach is significant because railway infrastructure requires substantial long-term capital investment, particularly for new railway lines, electrification, station redevelopment, rolling stock and other network upgrades.

The shift towards budgetary support can provide Indian Railways with greater flexibility in managing its long-term financing requirements while reducing reliance on market-linked borrowing.

IRFC’s Role Extends Beyond Rolling Stock

Indian Railway Finance Corporation (IRFC) is the dedicated market-borrowing arm of Indian Railways.

Its primary role is to finance rolling stock assets and railway infrastructure projects, which are subsequently leased to Indian Railways.

However, IRFC’s mandate also permits lending to entities having forward and backward linkages with the railway ecosystem. These include sectors such as power generation and transmission, mining, fuel, coal, warehousing, telecom, hotels and catering.

For the hospitality sector, the reference is notable because it places hotels and catering within the wider set of sectors that can have financial linkages with the railway ecosystem.

However, the latest government data does not provide a separate breakup of financing extended to hotels or catering.

What It Means for Travel, Hospitality and Tourism

The broader financial picture matters to the hospitality and travel industry because the ability of Indian Railways to sustain infrastructure spending directly influences passenger capacity, connectivity, station infrastructure and tourism access.

Continued investment in rolling stock can support the expansion and modernisation of passenger services, while infrastructure spending can improve connectivity to tourism destinations and strengthen the movement of travellers.

For hospitality businesses operating around railway stations, tourism corridors and major passenger destinations, railway infrastructure investment can influence footfall, accessibility and destination development.

The reference to hotels and catering in IRFC’s lending mandate also highlights the interconnected nature of the railway and hospitality ecosystems. However, the latest figures primarily concern Indian Railways’ overall debt servicing and do not indicate a specific new hospitality financing programme.

Financial Discipline Remains the Focus

The government’s latest data presents a railway financing model increasingly supported by direct budgetary allocations, alongside continued repayment of existing financial obligations.

With principal repayments reaching ₹24,853 crore in FY2025-26 and government funding playing a larger role in infrastructure and rolling stock, the emphasis remains on maintaining debt-servicing capacity while continuing capital investment in the railway network.

The information was provided by the Ministry of Railways through a reply concerning Indian Railways’ financial position on August 7, 2026.