Indian Railways is a massive public enterprise. There is a separate budget every year for railways alone. It crisscrosses the entire country with more than 70,000 miles of tracks and thousands of stations.
If you would like to hop in and out to see the villages and towns and country side, then the best way is through Indian Railways pass available only for foreign tourists. An IndRail pass gives unlimited travel across the whole Indian Railways network in your chosen class for a time period which you choose.
For around 600 dollars one can travel in AC2 class with sleepers or any other class of trains below the AC class for 90 days. If you prefer a shorter durations A 7-day AC2 pass costs $135 , a 15-day pass $185 , a 21 day pass $198.
Now if you prefer not buying a pass and travel – you can get tickets on sleeper class AC1 (the top of the line) and travel for around 1000 miles (say Hyderabad in south India to New Delhi the capital) for around $65-70. But beware, that seats are booked well in advance – so you have to book sometimes months in advance and reserve your spot. A major advantage of the pass is that if you fall ill for a day or two and have to change your plans, or simply change your mind about when and where you want to go, you can do this with a pass but may have to forfeit regular tickets. Unfortunately the closest authorized deal SD Enterprises. Another key advantage is that an entire 2 or 3 week itinerary can be painlessly pre-booked from outside India, avoiding the frustration of finding trains fully-booked if you waited to buy tickets when you got there.
Of the luxury (and quite expensive), then there is palace on wheels, the most well known. The train has a 7 nights & days itinerary departs from New Delhi and during its eight day journey, travels around Rajasthan with stops in Delhi, Jaipur, Ranthambore tiger reserve & chittaurgarh, Udaipur, Jaisalmer, Jodhpur, Agra, and back to Delhi.
Don’t forget to travel to Kerala. Kerala has a beauty of its own. 550km along India’s southwest coast, divided between the densely forested mountains of the Western Ghats inland and a lush, humid coastal plain of rice paddy, lagoons, rivers and canals. Its intensely tropical landscape, fed by the highest rainfall in peninsular India. You can do jungle camping or other wise. Kerala Forest Dev Corporation (Govt run agency).