Budget 2026: Infrastructure remains in focus as FY27 capex rises 9% to ₹12.2 lakh crore
- 1st February 2026
- 11:50 AM
- 2 min read
PL Capital
Summary
The Union Budget 2026 continues to prioritise infrastructure-led growth, with public capital expenditure for FY27 raised by 9% to ₹12.2 lakh crore. The higher allocation marks the 11th consecutive year of rising capex, reinforcing the government’s reliance on public investment to support economic growth.Mumbai | 11:50 Am
Summary
The Union Budget 2026 continues to prioritise infrastructure-led growth, with public capital expenditure for FY27 raised by 9% to ₹12.2 lakh crore. The higher allocation marks the 11th consecutive year of rising capex, reinforcing the government’s reliance on public investment to support economic growth.
Capex remains central to growth strategy as FY27 allocation rises
Capital expenditure remains at the core of the government’s growth strategy, with the Union Budget 2026 proposing a 9% increase in capex to ₹12.2 lakh crore for FY27, marking the 11th consecutive year of higher public investment.
While presenting her 9th Union Budget on Sunday, Finance Minister Nirmala Sitharaman underscored the continued reliance on public capital spending to support economic growth, even as the government stays committed to its fiscal consolidation path. The FY27 allocation compares with ₹11.21 lakh crore provided in FY26 (Budget Estimates).
Capital expenditure spending on long-term assets such as roads, railways, ports, defence infrastructure and urban facilities – is widely viewed as having a strong multiplier effect. It helps crowd in private investment, generate employment and strengthen medium-term productive capacity.
Over the past decade, capex has emerged as a cornerstone of the Centre’s growth strategy. Budgetary capital spending has risen steadily from ₹2.5 lakh crore in FY16 to ₹11.21 lakh crore in FY26, while effective capital expenditure has more than quadrupled, increasing from ₹3.8 lakh crore in FY16 to ₹15.48 lakh crore in FY26.
The emphasis aligns with the Economic Survey released on January 28, which argued that capital expenditure delivers more durable gains in incomes and living standards than transfer-led spending by improving infrastructure, supporting employment and raising productivity
For more updates on Union Budget 2026 follow PL Capital
