Budget 2026-27: India Needs Stronger State-Led Capex Push for Growth

• The Budget 2026-27 should prioritize a significant state-led capital expenditure (capex) push to drive economic growth amidst global uncertainty and declining private investment.
• A proposed incremental capital spending of ₹5 lakh crore over five years, with ₹2.98 lakh crore for 2026-27, aims to invest in infrastructure, green energy, housing, and human capital.
• Public investment has high fiscal multipliers in India, potentially increasing GDP by 0.7–1.1 percentage points and creating 0.9 million to 2.7 million jobs, especially in labor-intensive sectors.
• Enhanced public infrastructure will mitigate risks and boost returns for private businesses, attracting corporate investment and FDI rather than displacing private spending.
• The proposal integrates growth with sustainability goals, using Green, ESG, and Sustainable Development Bonds to finance renewable energy and green hydrogen projects, aligning with India's decarbonization targets.

Why It Matters: Budget 2026-27 must prioritize state-led capital expenditure to boost growth, create jobs, and achieve sustainability goals.