
The Union Budget 2025-26 outlines a strategic capital expenditure plan, focusing on critical sectors such as defense, railways, and roads. This balanced approach highlights the government’s commitment to bolstering national security, enhancing transportation infrastructure, and sustaining economic growth, while maintaining fiscal discipline.
Defense: Capital outlay rises to strengthen national security
The defense sector witnessed a notable increase in capital outlay, underscoring the government’s continued focus on modernizing and strengthening the country’s defense capabilities. The budget estimate (BE) for FY25 stood at ₹1.72 trillion, while the revised estimate (RE) for FY25 was slightly lower at ₹1.59 trillion. For FY26, the capital outlay is set to rise to ₹1.8 trillion, reflecting a 4.6% increase over the FY25 budget estimate and a significant 13.3% growth over the revised FY25 figure.
Railways: Consistent capital outlay at ₹2.52 trillion
The railways sector has seen a consistent allocation of capital expenditure, signaling the government’s intent to consolidate and optimize ongoing projects. The capital outlay for FY25 BE, FY25 RE, and FY26 BE is uniformly pegged at ₹2.52 trillion, indicating 0% growth year-on-year.
Roads: Sustained focus with ₹2.72 trillion allocation
The roads sector has also received a consistent allocation, emphasizing the importance of ongoing infrastructure projects. The capital outlay for roads remains steady at ₹2.72 trillion for FY25 BE, FY25 RE, and FY26 BE, marking 0% growth over the past year.
The Union Budget 2025-26 reflects a thoughtful allocation of capital expenditure, balancing growth imperatives with fiscal prudence. The increased outlay in defense underscores a focus on national security and self-reliance in defense manufacturing, while the steady allocations for railways and roads indicate a commitment to completing existing projects and optimizing infrastructure development.
This balanced approach ensures that critical sectors continue to drive India’s long-term growth trajectory, fostering economic resilience and development while adhering to fiscal responsibility.