Private Capex Revival Expected

The jury is out as to whether in the net analysis the flat infra spend will lead to a slowing of GDP growth compared to earlier years

- Vinayak Chatterjee, Founder, Feedback Infra Pvt Ltd

This is certainly an episodic event for the infrastructure sector where the increase in outlay is practically 0%. The budgetary provision for the sector for FY25 was ₹11.1 lakh crore, and the capex budget for FY26 has just been announced as ₹11.2 lakh crore. This raises some serious economic issues. One, over the last many years, public infrastructure spends have been used to pump-prime economic growth. This has been particularly true of the National Democratic Alliance government that has often put out statistics to say that ₹1 of infra spend results in ₹3 of GDP growth. So, does a near 0% increase signal a significant shift in economic thinking and planning? Is pump-priming now expected to come from a revival of consumer spending, private capital, and the bouquet of ease-of-doing business measures?