Centre Gets Rs 0.8 Trillion Capex Boost for FY26

The central government has extra space in the fiscal deficit to push up expenditure by at least Rs. 0.8 trillion in FY2026 relative to the Budget Estimates (BE), as the higher GDP and RBI dividend payout provide room for it, according to a report by ICRA.

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The report highlighted various positive factors in the economy and added that the government could raise expenditure by Rs. 0.8 trillion in FY2026. If the full amount is used for capex, the total capex would rise to Rs. 12.0 trillion from the budgeted Rs. 11.2 trillion, raising its growth to 14.2 per cent, compared to 6.6 per cent currently.

ICRA said, "FY2025 fiscal deficit contained at 4.8 per cent of GDP; higher GDP, RBI dividend payout provides space for Rs. 0.8 trillion extra capex in FY2026."