Indian Railways (IR) network is facing capacity constraint in some routes owing to growth of passenger and freight traffic. The line capacity of railway network depends on the type of signalling. Block Signalling is the method of Signalling trains from one station to next. Conventional block signalling using Block Instrument suffers from a major draw back of proving the complete arrival of main by physical verification by the Station Master. Further to ensure safety, strict sequential operation procedure of block instrument is being enforced. Any violation in this can cause a failure (through safe side) and lead to detention to traffic. The existing procedure results in joint control of block section between stations by the station masters on either side. This imposes certain capacity constraints [1]. A brief review of present methods of block working in IR network and need for axle counter based block signalling are presented. Increase in capacity that could result in using axle counter block signalling is reported along with advantages. A new procedure for block working is proposed which can enhance line capacity by 15-20%. © 1999 IEEE.