Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved two critical railway projects with a total investment of Rs 6,798 crore, aimed at improving connectivity, enhancing logistical efficiency, and driving economic growth. Additionally, the Cabinet has sanctioned the establishment of a Rs 1,000 crore Venture Capital (VC) Fund to accelerate the development of space startups under the aegis of IN-SPACe.
Both decisions, taken on Thursday, are strategically aligned with the government’s vision of boosting infrastructure, fostering innovation, and supporting the “Atmanirbhar Bharat” mission.
Railway Projects to Boost Connectivity and Logistics
The two approved railway projects, expected to be completed within five years, are designed to streamline transportation networks, lower logistics costs, reduce oil imports, and decrease carbon emissions. These projects will generate direct employment for approximately 106 lakh human-days, contributing significantly to job creation and the local economies.
The first project involves the doubling of the Narkatiaganj-Raxaul-Sitamarhi-Darbhanga and Sitamarhi-Muzaffarpur sections, spanning 256 kilometres. This expansion will improve rail connectivity to critical regions, including Nepal, Northeast India, and border areas. The enhanced capacity will facilitate the movement of both passenger and goods trains, ensuring faster and more efficient transport, and contributing to the socio-economic growth of these regions.
The second project focuses on the construction of a new 57-kilometer rail line between Errupalem and Namburu via Amaravati. This line will traverse through the NTR Vijayawada and Guntur districts of Andhra Pradesh and Khammam district of Telangana, providing improved connectivity to 168 villages and approximately 12 lakh people. The project will include the establishment of nine new stations, expanding the Indian Railways network by 313 kilometres across eight districts in Andhra Pradesh, Telangana, and Bihar.
These railway expansions are particularly critical for the transportation of commodities such as agricultural products, coal, iron ore, steel, and cement. The additional capacity is expected to support the movement of 31 million tonnes of freight annually, contributing to the growth of industries and bolstering supply chains. Furthermore, the projects are expected to reduce CO2 emissions by 168 crore kilograms—equivalent to planting seven crore trees—thus supporting India’s climate goals.
Notably, the new line between Errupalem and Namburu will provide direct connectivity to Amaravati, the proposed capital of Andhra Pradesh, enhancing industrial mobility and service reliability for the Indian Railways. The multi-tracking of key sections will also alleviate congestion and improve operations on some of the busiest routes, thereby supporting the PM Gati Shakti National Master Plan for multi-modal connectivity.
While explaining the Amravati railway connectivity, Union Minister Ashwini Vaishnaw stated that this project will provide direct connectivity of Amravati with Hyderabad, Chennai and Kolkata, improving the access to religious places as well as important ports like Machilipatnam, Krishnapatnam and Kakinada. This project, estimated to cost Rs 2,245 Crore, will also include the construction of a 3 km long bridge across the Krishna river.
After the announcements, Andhra Pradesh Chief Minister N Chandrababu Naidu took it to social media and wrote: “On behalf of the people of Andhra Pradesh, I extend my heartfelt thanks to Hon’ble Prime Minister Shri Narendra Modi Ji and Hon’ble Union Minister for Railways Shri Ashwini Vaishnaw Ji for further enhancing AP’s rail connectivity today. The long-awaited railway line to Amaravati has been a cherished dream for our people. This new 57 km line, with an investment of Rs 2,245 Cr, now places our capital city on the Indian Railway Map, connecting it to major cities.”
“I also express my gratitude for sanctioning a 3.2 km bridge over the Krishna River as part of this project. I humbly request Hon’ble Ashwini Vaishnaw Ji to complete these projects within four years, with the Krishna River Bridge standing as a symbol of Amaravati’s grandeur. The GoAP will extend full cooperation,” he added.
VC Fund to Propel India’s Space Sector
In another significant move, the Union Cabinet has approved the establishment of a Rs 1,000 crore Venture Capital Fund dedicated to supporting space startups. The fund, managed under the Indian National Space Promotion and Authorization Center (IN-SPACe), aims to accelerate private sector growth in the space economy, a sector that is projected to expand from $8.4 billion to $44 billion by 2033.
The deployment of the fund will occur over five years, with annual investments ranging from Rs 150 crore to Rs 250 crore, depending on investment opportunities. The fund is expected to support 30-35 startups, with equity investments ranging from Rs 10 crore to Rs 60 crore, depending on the company’s growth stage. Early-stage companies could receive Rs 10-30 crore, while late-stage growth firms could benefit from Rs 30-60 crore investments.
This strategic infusion of capital is designed to drive advancements in space technology, create a vibrant innovation ecosystem, and boost global competitiveness. It will help Indian startups scale their operations, invest in research and development (R&D), and expand their workforce, thereby generating both direct and indirect jobs across engineering, software development, data analysis, manufacturing, and professional services.
The government’s goal is to foster the development of a robust private space industry, supporting startups across the entire space supply chain—upstream, midstream, and downstream. The VC fund will play a crucial role in retaining space companies domiciled within India, countering the trend of firms relocating abroad due to limited funding. By supporting early-stage equity investments, the fund will attract additional private capital and signal the government’s commitment to advancing space reforms under the “Atmanirbhar Bharat” initiative.
The creation of this fund is part of the broader 2020 space sector reforms, which were introduced to promote private sector participation in space activities. With over 250 space startups already established, the timely availability of risk capital is critical for scaling these ventures and preventing talent loss. The fund’s impact is expected to boost employment, stimulate innovation, and strengthen India’s leadership in the global space market.
Union Minister Vaishnaw stated: “The entire value chain of the space sector will be benifited from this initiative. In the PLI for electronics manufacturing, because of the investment and support given by the government the total production in electronics PLI has already reached Rs 595000 Crore and total employment created because of PLI is 109250. This is just one component of the PLI. So we can say that in the case of space, we will have similar success.”
Both the railway and space sector initiatives underscore the government’s long-term vision for infrastructure development and innovation-driven growth. The railway projects will not only improve connectivity across key regions but also support sustainable logistics and freight transport. Meanwhile, the VC fund for space startups will propel India’s private space industry, ensuring the country remains competitive on the global stage while fostering a strong domestic ecosystem.
