Infrastructure Outlook Ahead of Union Budget 2026: Sustaining Capital Investment Momentum

In the Union Budget for FY2025-26, the government allocated a total capital expenditure (Capex) of ₹11.21 lakh crore, amounting to about 3.1% of GDP and reaffirming infrastructure as a core driver of growth.

As India prepares for the Union Budget on February 1, 2026, the infrastructure sector is widely seen as central to the economic agenda once again. Policymakers and industry analysts expect the government to continue high capital outlays, with a focus on the timely execution of key projects.

Expectations for Budget 2026: • Capex Stability or Growth: Given the ₹11.21 lakh crore allocation last year, there is an expectation that total infrastructure outlay will be maintained at similar or slightly higher levels to sustain growth momentum. • Project Execution Emphasis: Rather than announcing new standalone schemes, emphasis is expected on accelerating work on ongoing projects such as national highways, freight corridors, urban mass transit systems, and logistics parks. • State Support Mechanisms: Following last year’s announcement of long-term interest-free loans for states to support capital expenditure reforms, similar mechanisms may be reinforced to help state governments drive local infrastructure work.

Economic Outlook: Infrastructure investment has consistently played a stabilising role amid global economic uncertainty. By underpinning connectivity, logistics efficiency, and industrial growth, sustained Capex outlays contribute to broader economic resilience.

Forward View: A continuation of elevated infrastructure spending in Budget 2026 could bolster investor confidence and support job creation across regions. Clear timelines for project completion and strengthened monitoring frameworks are considered vital to translating budgetary commitments into tangible development outcomes.

Overall, the infrastructure sector is expected to remain an anchor for economic policy in Budget 2026, with spending patterns designed to support medium-term growth and national connectivity goals.