Capital expenditure
- How often
- Every yearUnion Budget, 1 February
- Next release
- Mon 1 FebIn 81 days · expected · 11:00 AM
2026-27, up from ₹10.96 lakh cr in 2025-26.
Events on this chart
Source: Union Budget, released 1 Feb 2026 · Chart: Clarity UPSC
- Previous
- ₹10.96 lakh cr2025-26
- Highest
- ₹12.22 lakh cr2026-27
- Lowest
- ₹10.52 lakh cr2024-25
3 readings since 2024-25.
Story
What the Centre spends on building assets such as roads and railways.
What is happening now As of 2026-27
The Union Budget 2026-27 allots ₹12,21,821 crore to capital expenditure, 3.1% of Gross Domestic Product (GDP). For 2025-26 the Centre had budgeted ₹11,21,090 crore and revised this to ₹10,95,755 crore; by the provisional accounts of the Controller General of Accounts (CGA), it spent ₹10,69,119 crore. The Finance Minister said the increase is meant to continue the momentum of public investment, which has grown from ₹2 lakh crore in 2014-15. The total includes ₹2 lakh crore of loans to states for their own capital spending.
Adding the grants the Centre gives for building assets, effective capital expenditure is budgeted at ₹17,14,523 crore, 4.4% of GDP. Capital expenditure equals 72.1% of the fiscal deficit in 2026-27, up from 70.3% in 2025-26, which the Budget reads as better quality spending. By the end of September 2026 the Centre had spent ₹6,54,547 crore, 53.6% of the year's allocation, against 51.8% at the same point a year earlier (CGA).
Why it matters
Capital expenditure builds things that last: roads, railway lines, defence equipment and, through loans, the states' own projects. These assets cut transport costs and raise what the economy can produce for years. Building them creates work for contractors and labourers and orders for cement and steel.
Capital spending is the part of the Budget that leaves an asset behind for the money borrowed. The Budget tracks how much of the fiscal deficit pays for it, and comparing the actual spending with the allocation shows how much of the plan was carried out.
What it is
Capital expenditure is the Centre's spending that leaves behind an asset. It covers land, buildings, machinery and equipment, investment in shares, and loans to states, government companies and other bodies.
The Union Budget sets the allocation every February, and the Controller General of Accounts reports the spending month by month. The Budget also reports effective capital expenditure. It adds the grants the Centre gives states and others to build assets, which the accounts record as revenue spending.
Roads and railways take more than half of the Centre's capital spending. The Budget treats this investment as a driver of growth, because spending on infrastructure has a large multiplier effect: it sets off further rounds of income and spending, so output rises by more than the amount first spent, and jobs with it. The Centre also lends states money for 50 years, free of interest, to spend on their own capital projects; these loans count in its capital expenditure.
Read this number
- The publisher
- The Ministry of Finance presents the Union Budget to Parliament every year, usually on 1 February, with targets for spending, receipts and borrowing.
Terms on this page (2)
- CGA
- Controller General of Accounts
- GDP
- Gross Domestic Product
History
- 2014-15The Centre's capital expenditure is about ₹2 lakh crore.
- 2020-21Allocations for interest-free loans to states under Special Assistance to States for Capital Investment are about ₹12,000 crore; by 2025-26 they reach about ₹1.5 lakh crore.
- 1 Feb 2021The Budget raises capital expenditure to ₹5.54 lakh crore, 34.5% above the previous year's budget estimate.
- 1 Feb 2023Capital outlay rises 33% to ₹10 lakh crore, 3.3% of Gross Domestic Product (GDP), the third steep increase in a row. Effective capital expenditure is budgeted at ₹13.7 lakh crore.
Readings
| Period | Value | Status | Released |
|---|---|---|---|
| 2026-27 | ₹12.22 lakh cr | Budget estimate | 1 Feb 2026 |
| 2025-26 | ₹10.96 lakh cr | Revised | 1 Feb 2026 |
| 2024-25 | ₹10.52 lakh cr | Final | 1 Feb 2026 |
For UPSC
Know what counts as capital expenditure (assets, shares and loans), how effective capital expenditure adds grants for capital assets, and why the Budget links public investment to growth through the multiplier. The 50-year interest-free loans to states for capital spending recur in recent Budgets.