India’s FY2026-27 budget proposes ₹12.2 lakh crore in public capital spending and sets a fiscal-deficit target of 4.3% of GDP as Finance Minister Nirmala Sitharaman argues public investment can support continued growth.
Budget documents from India’s Ministry of Finance (MoF) put proposed capex at ₹12.2 lakh crore, up from the ₹11.2 lakh crore budget estimate for FY2025-26. The ministry lists ₹2 lakh crore as the budgeted public capex figure for FY2014-15. These are planned allocations, not recorded outlays.
At an HSBC event on Nov. 2, Sitharaman said government investment can shape private companies’ decisions to add or build production capacity, ANI and The Economic Times reported. ANI reported that Sitharaman credited public spending’s multiplier effect with results over the previous four to five years. Both outlets reported her saying, “We need to be fiscally prudent.”
The 4.3% deficit target is below the revised FY2025-26 estimate of 4.4%, according to MoF budget documents. The budget also proposes an Infrastructure Risk Guarantee Fund. Under the proposal, the fund would guarantee part of lenders’ exposure on loans to private infrastructure developers.
The Ministry of Statistics and Programme Implementation (MoSPI) reported real GDP growth of 7.8% year over year in April-June 2026, the first quarter of FY2026-27. The Economic Times reported Sitharaman referred to GST collections at the event. In a Nov. 1 release, the GST Network (GSTN) put provisional gross Goods and Services Tax (GST) revenue for October at ₹2,31,290 crore, up 22.9% from a year earlier.
MoSPI has scheduled the release of second-quarter FY2026-27 GDP estimates for Nov. 30.
