Union Budget 2026: Capex hike unlikely; govt wary of increased borrowing.

• Government is unlikely to significantly increase capital expenditure in Union Budget 2026.
• Higher capital expenditure would necessitate more borrowing, which is deemed unfavorable for the economy.
• Capital expenditure is projected to be around 3.2% of GDP in FY26, a slight increase from 3.1% in FY25.
• Officials state there is a limit to increasing capex as government investment is already high, and further increases could hinder private investment.
• The FY26 market borrowing target is 14.72 lakh crore, with high borrowing increasing the government's debt burden.

Why It Matters: Government limits capital spending to control debt, fostering private investment for growth.