Budget 2026-27: Power sector units plan ₹1 trillion investment in FY27

Investment commitments of the nine public sector enterprises under the power ministry rose to Rs 1,01,763 crore, an 18.6 per cent jump compared with FY26 revised estimates of Rs 85,829 crore, according to the Union Budget 2026–27. Power Grid Corporation (PGCIL), NTPC and NHPC together form the bulk of the outlay, with a combined Budget estimate of Rs 82,323 crore for FY27, up from Rs 69,478 crore in the revised estimates of FY26.

 

PGCIL’s investment outlay surged 32 per cent to Rs 37,000 crore, while the investment proposed by NTPC stood at Rs 31,000 crore, a 7 per cent increase over the revised estimate of Rs 29,000 crore for FY26. Similarly, NHPC’s investment is seen rising 15 per cent to Rs 14,323 crore.

 

The budgeted investments by other PSUs, including Damodar Valley Corporation (DVC) and Satluj Jal Vidyut Nigam (SJVN), will be raised to Rs 5,553 crore and Rs 9,416 crore, respectively. For North Eastern Electric Power Corporation (NEEPCO) and THDC India, investment is seen increasing to Rs 1,959 crore and Rs 2,385 crore, respectively.

 

Apart from PSU investments, the Budget estimate for the Centre’s scheme for the distribution sector, the Revamped Distribution Sector Scheme (RDSS), increased substantially to Rs 18,000 crore, as against the FY26 revised estimates of Rs 15,671 crore. This increased expenditure on discom reforms comes against the backdrop of mounting accumulated losses and a significant debt burden.

 

The accumulated losses of discoms stood at Rs 6.47 lakh crore and total borrowings at Rs 7.26 lakh crore at the end of FY25. The scheme, along with other government measures, has helped discoms improve their financial health, as they recorded a combined profit after tax of Rs 2,701 crore in FY25.

 

Among other important heads of budgetary outlay, the allocation for the Power System Development Fund (PSDF) has seen only a marginal increase from Rs 1,099 crore to Rs 1,103 crore, while the outlay for strengthening these systems has declined from Rs 1,194 crore in the FY26 revised estimate to Rs 969 crore in FY27.