Budget 2026: India Eyes Infra Boom with ₹12.2 Lakh Crore Capex Hike, No Tax Changes

ECONOMY

Overview

Finance Minister Nirmala Sitharaman unveiled Budget 2026-27, prioritizing infrastructure with a 9% capital expenditure hike to ₹12.2 lakh crore. New high-speed rail corridors and substantial highway allocations signal a continued growth push. Crucially, tax slabs remain unchanged, offering stability for taxpayers and businesses.

Infrastructure Thrust Continues

The significant increase in capital expenditure targets roads, railways, and waterways, underscoring the government's sustained focus on enhancing national connectivity and logistics. A substantial ₹2.78 lakh crore has been earmarked for railways, including the ambitious plan for seven new high-speed rail corridors across the country. Highways are also set to benefit, receiving an allocation of ₹3.09 lakh crore, representing an 8% year-on-year increase.

Fiscal Stability and Sectoral Allocations

In a move designed to provide predictability, the government announced no changes to the existing tax slabs. This fiscal prudence extends to tax devolution, with ₹1.4 lakh crore set to be provided to states. Defense spending sees a robust increase of over 15% to ₹7.84 lakh crore. Meanwhile, the Health and Family Welfare sector received approximately ₹1.05 lakh crore, a 9-10% rise, with specific boosts for Ayushman Bharat infrastructure.

The Ministry of Education will see its budget increase by 8.3% to ₹1.39 lakh crore. Funding for the transport sector as a whole, covering highways, rail, and other infrastructure, stands at around ₹5.99 lakh crores. While rural development and agriculture allocations saw moderate increases, the budget clearly signals a strategic prioritization of capital-intensive infrastructure projects and key social sectors.

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