Budget 2026-27: Sitharaman May Boost Capital Expenditure by 17% to Drive Growth

• Finance Minister Nirmala Sitharaman is expected to announce a 17% increase in capital expenditure for FY27, reaching ₹13.10 lakh crore, up from ₹11.21 lakh crore in FY26.
• This continued focus on infrastructure investment aims to stimulate economic growth, create employment opportunities, and boost consumption, following a decline in private sector capital expenditure post-COVID.
• Prime Minister Narendra Modi's statements indicate the government's commitment to accelerating reforms and increasing investment to drive demand.
• Despite sluggish private investment in export-oriented sectors due to global uncertainties and tariffs, the government plans to maintain its capital expenditure push.
• ICRA projects a 7.1% increase in gross tax revenue for FY27 and estimates the fiscal deficit to be 4.3% of GDP, lower than the FY26 estimate, even with increased capital spending.

Why It Matters: Government likely to increase capital expenditure by 17% in Budget 2026-27 to fuel economic growth.