With three more bodies recovered from the charred AC coach of Bangalore-Nanded Express, the toll in the mishap has risen to 26.
"So far 26 persons have died in the incident. Rescue operations are still going on," Anantpur District SP S Senthil Kumar told PTI.
The fire broke out at 3:30 am in the B1 coach packed with 64 passengers at Kothacheravu Railway Station.
"Rescue operations are underway. 23 persons including two children were charred to death in the accident,", District Collector, Anantapur, Lokesh Kumar told reporters.
A majority of the passengers were sleeping when the fire broke out.
SP of Guntakal Railway Police Janardhan said 13 people were injured in the mishap and have been shifted to various hospitals in Anantpur.
Prime Minister Manmohan Singh expressed shock and grief over the loss of lives in the mishap.
He also spoke to Railway Minister Mallikarjun Kharge and inquired about the rescue and relief work being carried out at the accident site.
Describing the incident as "tragic" and "most unfortunate", Kharge ordered an enquiry into the incident by Commissioner of Railway Safety.
The Railway Minister announced an ex-gratia of Rs 5 lakh to the next of kin of the deceased, Rs 1 lakh in case of grievous injuries and Rs 50,000 for simple injuries.
He has also asked senior railway officials such as Member Electrical and Director General Health to rush to the spot.
Chairman, Railway Board, Arunendra Kumar said the reason behind the accident is yet to be ascertained.
However, prima facie there could be two reasons - one is short circuit and the other presence of inflammable material, he said.
The magnitude of the accident suggests that short circuit was unlikely, he said.
Asked whether it could be inflammable material, he said it could be and the inquiry would go into it.
Kharge told PTI that the AC coach had 67 passengers on board, of which 23 were trapped in the fire, while others managed to alight as the attendant noticed smoke and the train was stopped.
Quoting preliminary reports from Railway officials present at the spot, he said, "Short circuit could have caused the fire" but the inquiry would reveal the exact cause.
The Railway Board Chairman said forensic experts have been called from Bangalore and Hyderabad to examine the site.
The Railway Minister and the Railway Board Chairman are rushing to the site.
The affected coach has been detached and the train has resumed its onward journey.
Senior Railway officials have rushed to the spot and relief and medical team have been pressed into service, the collector said.