He also announced a corpus of Rs 17,000 crore for the local rail network in Bengaluru, the capital of Karnataka which goes to polls later this year.
"The Mumbai transport system, which is the lifeline of the country, will be expanded and augmented to add 90 km of double line track at the cost of Rs 11,000 crore.
Maharashtra Chief Minister Devendra Fadnavis tweeted "Celebrate Mumbai!" moments after the announcement was made.
The suburban railway in Mumbai operates 2,342 local train services and carries more than 7.5 million commuters daily and this is the first time that the network is being expanded.
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For Bengaluru, Jaitley announced a corpus of Rs 17,000 crore, a day after the state cabinet approved the Bengaluru Suburban Rail Projects' first phase to be implemented in the next three years.
"A suburban network of approximately 160 km at an estimated cost of Rs 17,000 crore is being planned to cater to the growth of the Bengaluru metropolitan," Jaitley said.
Railway officials said that in the Bengaluru network, as of now, there will be a total of 58 trains offering 116 services. Each train will have a capacity to carry 1,800 to 2,000 passengers per trip.