Budget 2026 Allocates ₹12.2 Lakh Crore for Capital Expenditure, Driving Infrastructure and Industrial Growth

Budget 2026-27 announces substantial capital expenditure allocation of ₹12.2 lakh crore representing continued government commitment to infrastructure-led growth and industrial development. This enhanced capex focuses on building world-class infrastructure ecosystem essential for manufacturing competitiveness including industrial corridors connecting production hubs to ports, dedicated freight corridors for efficient logistics, multimodal connectivity through highways, railways and waterways, and smart industrial parks with plug-and-play infrastructure. Capital investment supports PM Gati Shakti National Master Plan for multimodal connectivity, reduces logistics costs from current 13-14% of GDP to single digits, and strengthens supply chain infrastructure. Key areas of capital deployment include port modernization and connectivity, airport cargo facilities, warehousing and cold chain infrastructure, digital customs clearances, and last-mile connectivity to industrial estates. The budget introduces new schemes encouraging domestic production of high-value construction and infrastructure equipment, reducing reliance on imports and fostering indigenous capabilities in capital goods manufacturing. Continued rise in capital expenditure stimulates demand for machinery, industrial equipment, steel, cement and generates strong multiplier effect across manufacturing value chain supporting India's goal of becoming manufacturing powerhouse.