Budget 2026: Govt raises infra spending by 8.8% to record ₹12.2 trillion

India's federal government will spend a record ₹12.2 trillion ($133.08 billion) on ‍infrastructure in the ​upcoming financial year that begins on April 1, Finance Minister Nirmala Sitharaman said during her annual budget presentation on Sunday.

The spending plan is 8.8 per cent higher than the ₹11.21 trillion budgeted for the current fiscal ​year, which was the highest on record so far.

India has significantly raised infrastructure spending after the Covid-19 pandemic, aiming to boost economic growth and create more jobs in the world's most populous country.

Capital goods companies such as Larsen & Toubro, IRB Infra, NBCC, Action Construction jumped between 1.3 per cent and 4 per cent on higher capex spending and announcements to scale up infrastructure development.

 

"The capex outlay for fiscal year 2027 looks a bit modest and misses market expectations slightly, but overall, a positive ‌for the manufacturing sector. It will ​also be good for private sector capex," said Amit Anwani, an analyst at Prabhudas Lilladher.

India's economy has so far withstood punitive US tariffs imposed ‍by President Donald Trump. The economic growth has been forecast at 7.4 per cent for the year ending March ‍31 ‌with the help ​of government spending on infrastructure ‍and income and consumption tax cuts that boosted consumer ‍spending.