Budget 2026: Capex Will Rise by Nearly 12%, Railways and Infra to be in Focus

As per news reports from Business Today, the government is expected to raise capital expenditure (capex) by around 10% to 12% in FY27. The move is aimed at supporting economic growth at a time when the government is also hoping for a revival in private investment.

Railways and Roads to Remain Key Focus Areas

As in previous years, railways and roads are likely to receive a large share of the capital outlay in Budget 2026. Railways continue to require sustained investments for infrastructure modernisation, capacity expansion, and safety upgrades. Similarly, spending on roads and highways is expected to remain strong to improve connectivity and logistics efficiency across the country.

Newer Sectors Likely to Get Higher Allocation

Alongside traditional sectors, the government is expected to step up investments in urban infrastructure, ports, and renewable energy. These areas are increasingly seen as critical to meeting the evolving needs of the economy, including urbanisation, trade expansion, and the energy transition.

The finance ministry has reportedly held consultations with various administrative ministries to identify sectors where fresh capital investments are required, signalling a broader and more diversified capex strategy in FY27.

Capex Seen as Key Growth Driver

Higher government capital spending has played an important role in supporting economic growth in recent years. There is also optimism that sustained public capex, combined with tax cuts and lower interest rates, could boost consumption and encourage private companies to step up their own investments.

Capex Had Risen 10.1% YoY in 2025 

In the current fiscal year, the Centre allocated ₹11.21 lakh crore towards capital expenditure, a 10.1% increase over the revised estimates of FY25. Between April and November 2025, 58.7% of the full-year capex target had already been utilised.

Railways spent 72% of its allocated capex, while roads and highways used 65% of their budgeted outlay during the same period. Expectations are that the full allocation will be utilised by the end of the fiscal year.

Budget Timeline Ahead

Most Budget Estimates for FY27 are likely to be finalised after the release of the first advance GDP estimates on January 7, which will provide clearer visibility on economic performance. The Union Budget 2026 is scheduled to be presented on February 1.

Read more: Ather Energy to Raise Scooter Prices by Up to ₹3,000 From January 1, 2026.

Conclusion

With capital expenditure set to rise by nearly 12% in Budget 2026, the government is signalling its continued commitment to infrastructure-led growth. While railways and roads will remain central to the capex push, higher allocations for urban infrastructure, ports, and renewable energy point to a more balanced investment approach. If private investment responds positively, the capex strategy could play a crucial role in sustaining economic momentum in FY27.

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