FY26 Capex
Govt confident of meeting FY26 capex aim; spending in more sectors
This story was originally published at 09:02 IST on 21 July 2025
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NEW DELHI – The Indian government is confident its spending on capital investments in the current financial year will not undershoot the Budget target, a senior finance ministry official said. The government has stepped on the accelerator from the very start this year, which should help meet the capital expenditure target of INR 11.21 trillion as set in the 2025-26 (Apr-Mar) Budget, the official added.
The Narendra Modi government has relied on large capital spending to boost economic growth since the COVID-19 pandemic, especially as private sector investments remain subdued. There have been concerns on how much the government can spend on investments because of capacity constraints, but the Centre is trying to expand the sectors in which it will push capital spending, the official said on the condition of anonymity.
The government has undershot its capital expenditure in the past and was expected to miss the Budget target in FY25 as well. However, the government overshot last year's revised Budget target of INR 10.18 trillion by over 3% to INR 10.52 trillion, thanks largely to a record high expenditure of INR 2.4 trillion in March.
The government has spent INR 2.21 trillion on capital investments in the first two months of FY26, accounting for nearly 20% of the full year aim. "Capex cannot be only in road, housing, so government is also focusing on sectors that are aligned with its reforms thrust like urban and rural reforms," the official said. "That being said, capex is also cyclical so cannot entirely say that the problem of capacity constraints is behind us." End
Reported by Priyasmita Dutta
Written by Shubham Rana
Edited by Vandana Hingorani
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