Government maintains the investment push in Budget 2026-27

Government hikes capital expenditure by 12 percent in Union Budget 2026

Considering importance of infrastructure investments in job creation as well as indirect support to boost consumption, the government has maintained capital expenditure investments. In the Budget 2026-27, Government has hiked capital expenditure to Rs 12.21 lakh crore, which is about 12 percent increase as compared to Revised estimates for 2025-26.

In addition to hiking Government investments, incentives provided for sectors like Data Centres, Electronic manufacturing services as well as small and medium enterprises (SME) would crowd in private investments thereby maintaining momentum witnessed in the private sector investments. Healthy increase in Government investments as well as higher private capex would maintain the overall uptick in Investment cycle.

As expected, railways, roadways, defence services have witnessed major capex allocation by Central Government witnessing increase of 10/8/18 percent respectively. In addition, Government has also increased the transfer to states so that they can undertake infrastructure development with the allocation increasing by whopping 29 percent.

Higher capital expenditure would enhance the order awarding as well as earnings visibility & is positive for construction companies such as L&T, Afcons Infrastructure, NCC Limited, PNC Infratech, HG Infra Engineering as well as KNR Constructions.