Capex budget may rise to ₹12.5Lcr

Counter-cyclical step amid external headwinds, particularly US tariffs

- PRASANTA SAHU

AFTER HOLDING THE Union government's capital expenditure (capex) budget target at about ₹11 lakh crore for two successive years, the Centre is likely to step up its investment push in FY27, with the outlay possibly rising to around ₹12.5 lakh crore.

The increase is being seen as a counter-cyclical measure to support domestic economic activity at a time when global uncertainties - particularly those arising from tariff actions by the United States-could weigh on exports, private investment and overall growth. Even with the expected increase, the government is likely to keep the capex-to-GDP ratio close to 3%, a level widely regarded as fiscally prudent while still allowing for asset creation.