Budget 2026: FM sets ₹12.2L crore capex target for infrastructure
What's the story
Nirmala Sitharaman has unveiled a capital expenditure (capex) target of ₹12.2 lakh crore for the fiscal year 2026-27. The announcement was made during her ninth consecutive Union Budget presentation in Parliament today. The move is aimed at bolstering infrastructure development and public investment, which are seen as key drivers of economic growth.
Past performance
Previous fiscal's focus on capex
The previous fiscal year (2025-26) had a strong focus on capex, with an allocation of ₹11.21 lakh crore. This was slightly higher than the revised estimate of ₹10.18 lakh crore for FY25 and accounted for about 3.1% of India's GDP. The country is among the top public investment spenders globally, further cementing its commitment to infrastructure development as a growth driver.
Future projections
Effective capex in FY26
For the current fiscal year (FY26), the effective capex is projected at ₹15.48 lakh crore, up from ₹13.18 lakh crore in the revised estimates of FY25. This figure accounts for grants-in-aid for capital asset creation and indicates a continued commitment to infrastructure investment as a key driver of economic growth.
Improved spending
Capital expenditure utilization in FY26
Data from the Controller General of Accounts (CGA) shows that capital expenditure utilization during April-December FY26 was 70.3% of the full-year budget estimate (BE). This is a significant improvement over last year's same period, which had a utilization rate of just 61.7%. The increase indicates an improved pace of spending and commitment to infrastructure development in India.
Strategic initiatives
Measures to boost infrastructure
Sitharaman also announced several measures to boost infrastructure in India, especially in Tier-2 and Tier-3 cities. The government plans to set up a risk guarantee fund for the infrastructure sector and introduce a scheme for enhancing construction and infrastructure equipment to strengthen domestic manufacturing. These initiatives are part of the broader strategy to bolster India's economic growth through improved infrastructure development.