He said railway stations in the country look old and participation of private players in their modernisation would be economically viable and provide a "win-win" situation.
"We want the railway stations to have better facilities than airports. This is our dream and it is not a difficult thing to do and this is economically viable too," Modi said addressing a gathering here during inauguration of rail link to Katra, the base of Vaishno Devi shrine.
He said he has already discussed the discussed the issue in detail with railways and "you will see a change in near future. We will work it out soon."
Observing that stations can be modernised thorough PPP model, the Prime Minister said, "private parties would also be ready to invest because this is a good project economically and will benefit everyone. This would be a win-win situation project and we want to move ahead in this direction in the coming days."
Modi said the railway stations in metros and important cities such as Jammu would be a priority for the government with regard to development of railway stations.
He said the Railway Ministry has been given a detailed outline of the project.
The indication came just ahead of the presentation of the Rail Budget to Parliament on July 8.
Railways has been incurring a loss of about Rs 900 crore per month in passenger segment and has been looking for options for infusion of funds for modernisation.
The Prime Minister announced that Katra station will be environment-friendly as it will be run on solar power. "We want environment-friendly transportation system in the state. By protecting environment we can give more facilties to passengers. So it can be a station which can be fully run by solar power," Modi said.
He said the Railway Board Chairman has assured him that action would be initiated in this direction shortly.
Modi also said that passes for visiting Vaishno Devi shrine will be issued at the Katra station as it will save time of the pilgrims coming from all over the country. Dedicating the Katra line to the nation, Modi said a holy atmosphere is prevailing here.
"A step has been taken to connect Mata Vaishno Devi by train at a time when on the one side, Amarnath Yatra is going on while on other side, (Muslim) holy month of Ramzan is on underway," he noted.
"This is a service for the entire country where pilgrims want to visit Mata Vaishno Devi and this service is for them. The rail connectivity to Katra is not only benefit Jammu and Kashmir but the entire country," he added. Earlier, Chief Minister Omar Abdullah expressed his concern over the fate of Jammu after Katra line becomes operational.
Modi said there will be no problem in the development of Jammu and that he could say so from his experience.
"When facilities increase, people use their time to go other places. So, I think, a person who comes to Katra directly, will visit Jammu too. So I believe there will be opportunities for more qualitative development of Jammu."
Later in the day, Finance Minister Arun Jaitely in a Facebook post congratulated the Railways for extending its network to Katra.
"Trains have always been the backbone of our economy and today we have added another feather in our cap by extending the services to far areas of Jammu and Kashmir and modernizing the existing facility.
"My heartiest congratulations to all the citizens and Indian Railways for inaugurating the new route today," he said.