India Capital Expenditure 2026-27
Capital Expenditure
12.22 lakh crore
The Union Budget 2026-27 allocates Rs 12.22 lakh crore for capital expenditure — investment in roads, railways, bridges, defence equipment, and public enterprises. Capital expenditure creates productive assets that drive GDP growth and employment over the long term.
FY 2026-27
12.22 lakh crore
FY 2025-26
10.97 lakh crore
What Is Capital Expenditure?
Capital expenditure (capex) is government spending that creates long-term assets or reduces long-term liabilities. It includes construction of roads, railways, bridges, ports and airports, purchase of defence equipment, investments in public sector enterprises, and loans to state governments for capital projects. Unlike revenue expenditure, capex creates assets with multi-year benefits.
Why Capital Expenditure Matters
Capital expenditure has a high fiscal multiplier — every rupee spent on infrastructure generates Rs 2.5-3.0 in economic activity over time. Higher capex improves logistics, reduces business costs, creates employment, and attracts private investment. The government has sharply increased capex in recent budgets to drive post-pandemic recovery and long-term growth.
Capital Expenditure as % of GDP
India has been targeting capex at 3% or more of GDP, up from less than 2% a decade ago. This increase has been financed partly by reducing subsidies and improving tax collection. Key sectors receiving higher capex include National Highway Authority (NHAI), Indian Railways, defence modernisation, and smart cities.
Related Budget Data
Source: Union Budget Documents, Ministry of Finance, Government of India. All figures in Indian Rupees. Data provided by GovtBudget.com.