BUDGET
Govt pegs FY27 capex at INR 12.21 tln, up 11.5% on year
This story was originally published at 15:59 IST on 1 February 2026
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--BUDGET: FY27 capex at INR 12.2 tln
--BUDGET: FY27 PSU capex pegged at INR 10.190 tln
--BUDGET: FY26 PSU capex revised to INR 9.117 tln vs INR 9.666 tln budgeted
--BUDGET: FY27 interest-free capex loan to states seen at INR 1.85 tln
--BUDGET: FY26 capex loan to states cut to INR 1.44 tln from INR 1.50 tln
NEW DELHI/MUMBAI – The Union Budget on Sunday projected the central government's capital expenditure for the next financial year starting April at INR 12.21 trillion, up 11.5% from the revised estimate of INR 10.96 trillion for FY26. The revised capital expenditure for FY26 is INR 253 billion lower than the Budget estimate of INR 11.21 trillion.
The Centre's effective capital expenditure for FY27, including grants-in-aid for the creation of capital assets, is projected at INR 17.15 trillion, up 22.1% from the revised estimate of INR 14.04 trillion for FY26. Capital expenditure in FY27 accounts for 3.1% of GDP, the same as the revised estimate.
Announcing the Budget in Lok Sabha, Finance Minister Nirmala Sitharaman said the centre would provide capital expenditure loans to states amounting to INR 1.85 trillion.
The Narendra Modi government has increased capital expenditure by over six times since FY15.
In the first ten months of FY26, the government's capital expenditure totalled INR 7.88 trillion, up 15% year on year. This means the government has to spend INR 3.08 trillion in the remaining three months of the year to achieve the revised capital expenditure target. This translates to around INR 1.03 trillion capital expenditure each month. End
Reported by Priyasmita Dutta and Nandini Sinha
Edited by Saji George Titus
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