States, science, and defence get a lion’s share of increased capex funding

Science and technology funding is all expected to go to research and innovation.

Like last year, defence retained its top spot with a Rs 20,500 crore extra allocation, while states received Rs 31,220 crore extra as the government expects to continue its infrastructure push.

Last year, defence, states and police constituted a major share of spending by the government.

Telecom’s capex is expected to decrease further in FY26, as the sector will spend Rs 51,784 crore, compared with Rs 75,000 crore spent in FY25 and Rs 85,000 crore spent in FY24.

Steel is also a big loser, as the capex is expected to come down from Rs 8,500 crore to Rs 3,000 crore.

Roads and rail share dip in capex

In overall capex, roads, rail, states and defence still had the highest share, with the four accounting for 78 percent of the total capex allocation for FY26.

An earlier Moneycontrol analysis of Budget documents showed that the share of roads, rail and defence allocations, which account for nearly two-thirds of the government’s total capex spend, is set to decline to its lowest level of 62.8 percent in FY26.

Road capex is set to decline for the first time in a decade, as the ministry plans to spend Rs 2.72 lakh crore in FY26.

Railways capex is also flat from the previous year, as the government allocated Rs 2.52 lakh crore for FY26, similar to what it spent in the previous fiscal.