Government Optimistic About Capex Plans for FY26
The government is optimistic about its capital expenditure (capex) plans for FY26. Finance ministry sources indicate that the allocation for the current financial year will exceed the initial estimate of Rs 11.21 lakh crore.
Capex in the first two months of FY26 rose 54% year-on-year to Rs 2.21 lakh crore. This accounts for 19.7% of the total budgeted capex of Rs 11.21 lakh crore for the year.
The strong momentum in the first three months of FY26 has raised expectations. The full-year capex could outperform earlier projections. However, private capex remains a concern and needs to be pushed further.
On global challenges, the government noted that current trade tensions are unlikely to derail India’s fiscal trajectory. Instead, they present an opportunity for the government to step up spending and accelerate growth.
Capex rose to Rs 10.52 lakh crore in FY25, exceeding the annual target by 3.3%. According to the latest Union Budget, India remains committed to reducing its fiscal deficit to 4.4% of GDP in FY26, though the government may lower it further to around 4.2-4.3%.
