Finance Minister Nirmala Sitharaman increases capital expenditure to ₹12.2 lakh crore for Union Budget 2026

Key facts

• Finance Minister Nirmala Sitharaman has proposed to increase capital expenditure (capex) to ₹12.2 lakh crore for Financial Year (FY) 2026–27.
• The proposed capex marks an increase from the ₹11.2 lakh crore earmarked for the current fiscal year.
• Public capital expenditure has risen from ₹2 lakh crore in 2014–15 to the current Budget Estimate of ₹11.2 lakh crore for 2025–26.
• Infrastructure development will focus on tier-2 and tier-3 cities with populations exceeding five lakh that have become growth centres.
• The Indian economy is projected to grow at 7.4% in the current financial year with inflation expected at approximately 2%.
• The fiscal deficit for the current year is estimated at 4.4% of the Gross Domestic Product (GDP).
• India recorded a GDP growth of 8.2% in the second quarter of FY26, following a 7.8% expansion in the April–June quarter.
• Economic growth rates for the previous two financial years were recorded at 6.5% and 9.2% respectively.