Presenting the Union Budget 2026–27 in Parliament on Sunday, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said that the government’s “first kartavya” is to accelerate and sustain economic growth by enhancing productivity and competitiveness while building resilience to volatile global dynamics.
The Finance Minister announced a sharp increase in public capital expenditure, proposing an allocation of Rs 12.2 lakh crore for FY2026–27, up from Rs 11.2 lakh crore in Budget Estimates for 2025–26. She noted that public capex has risen manifold over the past decade, from Rs 2 lakh crore in FY2014–15, and has played a critical role in strengthening India’s infrastructure backbone.
Highlighting the government’s focus on asset monetisation, Sitharaman said initiatives such as Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and institutions like the National Investment and Infrastructure Fund (NIIF) and National Bank for Financing Infrastructure and Development (NaBFID) have significantly enhanced infrastructure financing.
She added that REITs have emerged as a successful instrument for monetising assets, and the Budget proposes accelerating the recycling of large real estate assets of CPSEs through the setting up of dedicated REITs.
To improve private sector confidence during the infrastructure development and construction phase, the Finance Minister proposed the creation of an Infrastructure Risk Guarantee Fund.
The fund will provide prudently calibrated partial credit guarantees to lenders, aimed at mitigating risks and crowding in private investment.
Emphasising environmentally sustainable movement of cargo, the Budget proposes new Dedicated Freight Corridors connecting Dankuni in the East to Surat in the West.
The government also plans to operationalise 20 new National Waterways over the next five years, beginning with National Waterway–5 in Odisha.
This will connect the mineral-rich regions of Talcher and Angul and industrial hubs like Kalinga Nagar to the ports of Paradeep and Dhamra.
To raise the share of inland waterways and coastal shipping from 6 per cent to 12 per cent by 2047, the Finance Minister announced the launch of a Coastal Cargo Promotion Scheme to incentivise a modal shift from road and rail.
Training institutes will be developed as Regional Centres of Excellence to build skilled manpower along the waterways, benefiting youth across these regions. In addition, a ship repair ecosystem catering to inland waterways will be established at Varanasi and Patna.
To promote sustainable passenger transport, the Budget proposes the development of seven high-speed rail corridors as “growth connectors.”
These include: Mumbai–Pune; Pune–Hyderabad; Hyderabad–Bengaluru; Hyderabad–Chennai; Chennai–Bengaluru; Delhi–Varanasi; Varanasi–Siliguri.
To enhance last-mile and remote connectivity and promote tourism, Sitharaman announced incentives for indigenising the manufacturing of seaplanes. A Seaplane Viability Gap Funding (VGF) Scheme will be introduced to support their operations.
Aligning with the Carbon Capture, Utilisation and Storage (CCUS) roadmap launched in December 2025, the Finance Minister said CCUS technologies will be scaled up across five key sectors power, steel, cement, refineries and chemicals.
The Budget proposes an outlay of Rs 20,000 crore over the next five years for this initiative.
Calling cities India’s engines of growth and innovation, Sitharaman said the government will now focus on Tier II and Tier III cities, including temple towns, to strengthen infrastructure and basic amenities.
City Economic Regions (CERs) will be mapped based on specific growth drivers to harness the power of agglomeration. The Budget proposes an allocation of Rs 5,000 crore per CER over five years for implementation.