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Transport infrastructure plays a critical role in shaping economic growth, employment generation and regional development, particularly in emerging economies. Among the various modes, railways occupy a strategic position owing to their ability to move large volumes of passengers and freight at relatively low unit costs while fostering market integration and industrial linkages. This study examines the role of Indian Railways in generating employment and contributing to regional economic development in India. Using secondary data drawn from the Indian Railways Year Books, Ministry of Railways Annual Reports, Economic Survey of India, NITI Aayog publications, and RBI state-level statistics, this study adopts a mixed quantitative approach. A descriptive analysis is employed to examine employment trends and capital expenditure, while employment multipliers are used to estimate direct, indirect, and induced employment effects. Additionally, a quasi-experimental difference-in-differences (DiD) framework is applied to assess the impact of railway connectivity upgrades on regional economic outcomes. The study findings reveal that Indian Railways remains one of the largest public-sector employers, with renewed recruitment and rising capital investment in the post-pandemic period. Employment multiplier estimates indicate that railway operations and infrastructure investment generate substantial indirect and induced employment across allied sectors such as construction, logistics, manufacturing, MSMEs, and services. Regional analysis shows that districts with improved railway connectivity experience significantly higher industrial investment, employment growth, and wage levels than non-connected regions. Overall, the study concludes that Indian Railways functions not only as a transportation backbone but also as a powerful engine for employment generation and balanced regional development. This study offers policy-relevant insights for leveraging railway investment to promote inclusive growth and long-term economic resilience in India.