Indian Economy News

US$ 135.6 billion Public Capex proposed in FY27

While presenting the Union Budget for 2026-27, Finance Minister Ms. Nirmala Sitharaman emphasized a strong push in public capital expenditure to catalyze India’s growth and enhance infrastructure capacity. Public capex has already increased from Rs. 2 lakh crore (US$ 22.2 billion) to Rs. 11.2 lakh crore (US$124.4 billion) in BE 2025-26, and the Budget has allocated Rs. 12.2 lakh crore (US$ 135.6 billion) for FY27. The Plan also proposes establishing an Infrastructure Risk Guarantee Fund to enhance the confidence of private developers through carefully designed partial credit guarantees.
To facilitate logistics and freight transport, the Budget demands the development of new Dedicated Freight Corridors from Dankuni to Surat and seeks to operationalize 20 new National Waterways over the next five years. A ‘Coastal Cargo Promotion Scheme’ has been proposed to raise the share of inland waterways and coastal shipping from 6% to 12% by 2047, thus encouraging a transition from road and rail. Regional centres of excellence for skill development in waterways and a ship repair facility in Varanasi and Patna will be developed to facilitate inland waterways transport. Seven High-Speed Rail corridors will be developed to link major city pairs, thus encouraging sustainable passenger transport. For last-mile connectivity and tourism, a ‘Seaplane VGF Scheme’ has been proposed to encourage domestic aircraft manufacturing. The Budget has allocated Rs. 20,000 crore (US$ 2.2 billion) for Carbon Capture Utilization and Storage (CCUS) technologies in the priority sectors over five years. The Budget also proposes a focus on City Economic Regions (CERs) for Tier II and Tier III cities, allocating Rs. 5,000 crore (US$ 555.6 million) per CER over five years.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.