BUDGET
Govt pegs FY26 capex at INR 11.21 tln, up 10.1% on year
This story was originally published at 13:37 IST on 1 February 2025
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--BUDGET: Revised capex INR 10.18 tln for FY25
--BUDGET: FY26 capex seen at INR 11.211 tln
MUMBAI/NEW DELHI– The Budget on Saturday projected the central government's capital expenditure for the next financial year starting April at INR 11.21 trillion, up 10.1% from the revised estimate of INR 10.18 trillion for FY25. The revised capital expenditure for FY25 is INR 927 billion lower than the Budget estimate of INR 11.11 trillion.
The Centre's effective capital expenditure for FY26, including grants in aid for creation of capital assets, is projected at INR 15.48 trillion, up 17.4% from the revised estimate of INR 13.18 trillion for FY25. The capital expenditure in FY26 accounts for 3.1% of GDP, unchanged from the revised estimate.
Announcing the Budget in Lok Sabha, Finance Minister Nirmala Sitharaman said that the government has provided an outlay of INR 1.5 trillion for the proposed 50-year interest-free loans to states for capital expenditure and incentives for reforms.
The Narendra Modi government has pressed the pedal on capital expenditure in the post-COVID-19 era to revive growth and crowd-in private investments. However, there has been a slowdown in public spending in the current financial year due to election-related restrictions. In the last six years, the government has increased capital expenditure by a little more than three times.
In the first nine months of FY25, the government's capital expenditure was at INR 6.85 trillion, up 1.7% on year. This means the government has to spend INR 4.36 trillion in the remaining three months of the year to achieve the revised capital expenditure target. End
Reported by Priyasmita Dutta and Srijita Bose
Edited by Saji George Titus
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