The government’s capital expenditure for 2026–27 is set at Rs 12.2 lakh crore, with major allocations for shipbuilding, national highways, railways, and metro rail projects, Expenditure Secretary V Vualnam said. In a post-Budget interview with PTI, he noted that sectors with large ongoing and new infrastructure projects—particularly highways, railways, and urban transport including metro networks—will continue to dominate public capex spending in the next fiscal year.
Overall Budget and Capital Outlay
The total government expenditure for 2026–27 is pegged at over Rs 53.47 lakh crore, with Rs 12.22 lakh crore earmarked as capital expenditure aimed at creating physical infrastructure and supporting long-term economic growth.
Shipbuilding as a Rising Priority
Shipbuilding has been granted infrastructure status and is expected to play a significantly larger role in the coming years. “Shipbuilding has become an infrastructure sector and will now be a big player. We want to increase India’s share globally. Currently, only about 5 per cent of import-export cargo moves on India-owned ships, with roughly Rs 6 lakh crore spent annually on rentals to foreign shipping companies. This will change, and shipbuilding will remain a key focus,” Vualnam said.
To support this push, the Union Cabinet approved a Rs 69,725 crore package in September last year to revive India’s shipbuilding and maritime sector. The plan follows a four-pillar approach to expand domestic capacity, improve long-term financing, promote greenfield and brownfield shipyards, strengthen technical skills, and introduce legal, taxation, and policy reforms to build a robust maritime ecosystem.
Rising Public Capital Expenditure
For the current fiscal year, the government has revised its capex estimate to Rs 10.95 lakh crore, slightly lower than the original Rs 11.21 lakh crore. Public capital expenditure has grown sharply over the past decade, from around Rs 2 lakh crore in 2014–15 to Rs 12.2 lakh crore in 2026–27. The capex for FY27 is projected at 4.4 per cent of GDP, marking the highest level recorded so far.
