Union Finance Minister Nirmala Sitharaman on Sunday announced a major push to infrastructure-led growth, proposing a public capital expenditure of ₹12.2 lakh crore for the financial year 2026–27, as part of the government’s strategy to accelerate economic growth, enhance productivity and build resilience against global uncertainties.
Presenting the Union Budget 2026–27 in Parliament, the Finance Minister said that boosting public investment remains the government’s foremost responsibility. She noted that public capital expenditure has increased significantly over the past decade, rising from ₹2 lakh crore in 2014–15 to ₹11.2 lakh crore in the Budget Estimates for 2025–26. To sustain this momentum, she proposed raising the allocation to ₹12.2 lakh crore in 2026–27.
Sitharaman highlighted that the government has undertaken several initiatives over the years to strengthen public infrastructure, including the introduction of innovative financing instruments such as Infrastructure Investment Trusts and Real Estate Investment Trusts, as well as the creation of institutions like the National Investment and Infrastructure Fund and the National Bank for Financing Infrastructure and Development. She added that REITs have emerged as a successful mechanism for asset monetisation and announced that the Budget proposes to accelerate the recycling of significant real estate assets of central public sector enterprises through the establishment of dedicated REITs.
To enhance private sector participation in infrastructure development, the Finance Minister announced the setting up of an Infrastructure Risk Guarantee Fund. The proposed fund will provide prudently calibrated partial credit guarantees to lenders, with the objective of strengthening confidence among private developers during the construction and development phases of infrastructure projects.
Emphasising environmentally sustainable movement of cargo, Sitharaman announced the proposal to establish new Dedicated Freight Corridors connecting Dankuni in the East to Surat in the West. The Budget also proposes to operationalise 20 new National Waterways over the next five years, beginning with National Waterway-5 in Odisha, which will connect the mineral-rich regions of Talcher and Angul with industrial hubs such as Kalinga Nagar and the ports of Paradeep and Dhamra. To raise the share of inland waterways and coastal shipping from six per cent to 12 per cent by 2047, the government will launch a Coastal Cargo Promotion Scheme to incentivise a modal shift from road and rail to waterways.
The Finance Minister further announced that training institutes will be developed as regional centres of excellence to create skilled manpower for inland waterways and coastal shipping. These centres are expected to benefit youth across the waterways’ network. In addition, a ship repair ecosystem catering to inland waterways is proposed to be established at Varanasi and Patna.
In a major step towards promoting sustainable passenger transport systems, Sitharaman announced plans to develop seven high-speed rail corridors between major cities as growth connectors. These corridors will link Mumbai with Pune, Pune with Hyderabad, Hyderabad with Bengaluru, Hyderabad with Chennai, Chennai with Bengaluru, Delhi with Varanasi and Varanasi with Siliguri.
To improve last-mile and remote connectivity and to boost tourism, the Finance Minister announced incentives to promote indigenous manufacturing of seaplanes. A Seaplane Viability Gap Funding Scheme will be introduced to support seaplane operations across the country.
On climate action and industrial decarbonisation, Sitharaman said that Carbon Capture, Utilisation and Storage technologies will be scaled up in line with the roadmap launched in December 2025. These technologies will be deployed across five key industrial sectors—power, steel, cement, refineries and chemicals. The Budget proposes an outlay of ₹20,000 crore over the next five years for the development and deployment of CCUS technologies.
Highlighting the role of cities as engines of economic growth, the Finance Minister said the government will now focus on Tier II and Tier III cities, as well as temple towns, which require modern infrastructure and basic urban amenities. To harness the economic potential of agglomerations, city economic regions will be mapped based on their specific growth drivers. The Budget proposes an allocation of ₹5,000 crore per city economic region over five years for implementation.
