Union Budget 2025: Rs 11 lakh crore capex target with a 10% thrust

Continuing its thrust on capital expenditure (capex) to create assets, the govt has allocated Rs 11.2 lakh crore for 2025-26, an increase of 10% than the revised estimate of the current financial year. The Budget also focusses on attracting more private investment in infrastructure by taking up projects on public-private partnership (PPP) mode.

Going by budget estimate (BE), the govt's effective capital expenditure for FY26, including both the Centre and states, is projected at Rs 15.5 lakh crore, compared with the revised estimate (RE) for FY25 pegged at Rs 13.2 lakh crore. The RE is lower than the BE of Rs 15 lakh crore for FY25.

In case of capex allocated for central govt departments for FY25, the RE has been reduced to Rs 10.2 lakh crore compared to the BE of Rs 11.1 lakh crore as key infrastructure ministries were unable to meet targets.

The Economic Survey on Friday had flagged slow down in capex in the first quarter due to Lok Sabha polls and the extended monsoon.

Union minister Ashwini Vaishnaw said the high allocation for capex shows how govt's priority is on infrastructure development.

As the govt is keen in attracting private investment in infrastructure, finance minister Nirmala Sitharaman, in her Budget speech, said, "Each infrastructure-related ministry will come up with a three-year pipeline of projects that can be implemented in PPP mode. States will also be encouraged to do so and can seek support from the IIPDF (India Infrastructure Project Development Fund) scheme to prepare PPP proposals."

She added that an outlay of Rs 1.5 lakh crore is proposed for the 50-year interest free loan to states for capex and incentives for reforms.