India increases infrastructure spending, vows fiscal discipline

Prime Minister Narendra Modi's government presented its annual budget to Parliament on Sunday, focusing on sustaining the country's economic growth despite volatile financial markets and trade uncertainty.

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In a speech introducing the budget, Finance Minister Nirmala Sitharaman said the governments plans to boost investments in infrastructure and domestic manufacturing while sticking to fiscal prudence.

India's annual budget will focus on accelerating and sustaining strong economic growth, Finance Minister Nirmala Sitharaman said on Sunday, raising infrastructure spending to a record as New Delhi pushes structural reforms in a volatile global environment.

Infrastructure outlays will rise to Rs12.2 trillion ($133.08 billion) for the 2026-2027 financial year, above the Rs 11.21 trillion budgeted for the current fiscal year, which was previously the high est on record. Ms Sitharaman said the budget prioritises long-term competitiveness, a stronger financial sector and investment in cutting-edge technologies including artificial intelligence.

The spending plan comes as India seeks to maintain momentum in one of the world's fastest-growing major economies.

The Ministry of Railways has been allocated a total capital expenditure (capex) of Rs 2,93,030 crore in the Union Budget for the financial year 2026-27. However, it received total outlay of Rs 2,78,030 crore in the Budget 2026. This is the highest-ever allocation for the ministry.

The education sector received a renewed push in the Union Budget 2026-27, with an allocation of Rs1,39,289 crore an increase of 8.278 over the previous year.

The Union Budget 2026-27 on Sunday enhanced the allocation for the Ministry of Health; Family Welfare to Rs 1,05,530.42 crore, reflecting an increase of 8.96 per cent over the Revised Estimates of FY 2025-26.