Over the past decade, India’s budget has demonstrated a strategic focus on capital expenditure (Capex) to drive infrastructure development and economic growth. The analysis of budgetary allocations reveals a significant increase in Capex, with a compound annual growth rate (CAGR) of 14.9% over the past ten years. This growth underscores the government’s commitment to long term development, as evidenced by the rise in Capex as a percentage of the total budget from 19% in 2019-20 to 31% in 2025-26. While the tax rebate stole the limelight in the budget discussions, we believe with nearly INR 16 lakh crores (USD $180 billion) of capital investments remain the most important key allocation in the budget.
As FY25 marks the completion of the 5 year period from the year 2020, when the National Infrastructure Pipeline (NIP) initiative was launched, we reviewed the progress on the government’s initial target of investing approximately ₹102.5 lakh crore on key infrastructure sectors such as energy, roads, railways, and urban development.