By Martin Shwenk Leade

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The Finance Ministry has begun consultations with various ministries and departments to explore new avenues for capital expenditure (capex) in the upcoming fiscal year, ET Now reported citing sources. According to the report, the government is examining ways to increase capex beyond the Rs 11.21 lakh crore set for FY26. The move is aimed at spurring demand in the economy and building on the momentum of infrastructure-led growth. Sectors such as Railways, Road Transport & Highways, Ports, and Shipbuilding have been the major drivers of capex so far. The government is also said to be assessing the potential capacity of key sectors and considering expanding the capex push into new areas such as urban infrastructure and sunrise industries. “The Finance Ministry is satisfied with the current pace of spending,” sources told ET Now, adding that infrastructure activities are expected to gain momentum after the monsoon season.Live EventsIt is to be noted that the capex in the first quarter of FY26 already stands at 25% of the budgeted target.The move comes against the backdrop of Finance Minister Nirmala Sitharaman’s Union Budget announcement earlier this year, where she proposed a 10.08% hike in capital expenditure to Rs 11.21 lakh crore for FY26. This followed a reduction of the current year’s capex target to Rs 10.18 lakh crore from Rs 11.11 lakh crore due to slower-than-expected utilisation. Economists and industry bodies had urged the government to sustain higher public spending in order to lift consumption and support growth, which is projected to hit a four-year low. India’s capital expenditure has become a key policy lever for growth, as it creates jobs and has a strong multiplier effect on the economy. The government’s bet on higher spending is intended to crowd in private investment, which has remained sluggish for much of the past decade. More than half the respondents in the Reserve Bank of India’s recent Systemic Risk Survey said they do not expect private capex to rebound in the near term, highlighting the challenge for policymakers. While industry body CII had suggested a 25% hike in capital spending for FY26, the government has balanced its capex ambitions with fiscal consolidation goals, relying on higher tax revenue and asset monetisation to fund the outlays. Add as a Reliable and Trusted News Source Add Now!
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News oncapex outlay FY26Finance Ministry capital expenditureinfrastructure spending Indiagovernment capex planseconomic demand growthurban infrastructure investmentfirst quarter FY26 spendingFY26 budget allocation(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless

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