The Centre achieved around Rs 10.75 lakh crore, or 98%, of its revised capital expenditure target of Rs 10.96 lakh crore for FY26, a senior official said.
In the Budget presented on February 1, the government had revised downward the FY26 capex target to Rs 10.96 lakh crore from the budget estimate of Rs 11.21 lakh crore.
“The capex achievement is very good,” the official said, adding that the momentum in asset-creating expenditure continued.
Infrastructure Engines
The Centre’s capex push was led by the Railway Board and the National Highways Authority of India (NHAI), which together accounted for 47% of total capital expenditure in FY26. The Railway Board invested Rs 2.6 lakh crore, while NHAI spent Rs 2.4 lakh crore. The Centre also nearly fully utilised the Rs 1.5 lakh crore earmarked for 50-year interest-free capex loans to states for FY26.
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In FY25, the Centre achieved capital expenditure of Rs 10.52 lakh crore against the revised estimate of Rs 10.18 lakh crore and the budget estimate of Rs 11.11 lakh crore. For the past two years, the Centre’s capex has remained around 3% of GDP, considered an ideal level under fiscal management norms, lending support to economic growth.
FY27 Outlook
For FY27, the central government has budgeted capital expenditure to rise 11.5% to Rs 12.2 lakh crore. Effective capital expenditure, which includes grants-in-aid to states for asset creation, is projected to grow 22.1% Rs 17.1 lakh crore.
The fiscal consolidation path has largely been budgeted through containment of revenue expenditure at 10.5% of GDP in FY27, down from 10.8% in FY26 RE, while maintaining capital expenditure at 3.1% of GDP. The Centre’s capital expenditure as a share of GDP has risen sharply from 1.7% in FY20. Including capital grants to states, it is estimated at 3.9% in FY26 RE.
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During April-February of FY26, for which official data is available, the government’s capital expenditure grew 14.5% year-on-year, while revenue expenditure excluding interest payments and major subsidies contracted 6%.
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