Budget allocates Rs 11.21 lakh crore capex for 2025-26, 0.9% higher than 2024-25(BE)

New Delhi [India], February 1 (ANI): Finance Minister Nirmala Sitharaman has allocated Rs 11.21 lakh crore for capital expenditure in the Union budget for 2025-26.

This marks a 0.9 per cent increase over last year’s Budget Estimate of Rs 11.11 lakh crore, but if compared with revised estimate of 2024-25 at Rs 10.18 lakh crore, the budget estimate of 2025-26 is substantially higher.

A capital expenditure, or capex, is used to set up long-term physical or fixed assets.

The defence sector capital expenditure has got the biggest hike of 4.6 per cent for the financial year 2025-26 at Rs 1.8 lakh crore.

In 2024-25 (budget estimate), it was Rs 1.72 lakh crore, which was later downwardly revised to Rs 1.59 lakh crore.

The defence sector capex target for 2025-26 is 13.3 per cent higher if compared with the revised estimate of 2024-25.

India’s defence sector is being pushed for substantial and sustained growth, driven by increasing capital expenditure. Key factors underpinning this growth include rapidly expanding defence exports and a significant emphasis on domestic manufacturing.

Over the past decade, the government has successfully implemented a paradigm shift in policy, procedures, and mind set to accelerate the growth of domestic defence manufacturing.

The government has introduced multiple policy measures and reforms to foster indigenous design, development, and production of defence equipment, thereby advancing self-reliance in defence manufacturing.

Significant investments are being made in defence and aerospace manufacturing, with the establishment of several defence hubs. Moreover, many global companies have already shared, or shown willingness to share, critical defence and aerospace expertise with India.

India’s defence exports reached a record Rs 21,083 crore (approximately USD 2.63 billion) in the financial year 2023-24, marking a 32.5 per cent increase from Rs 15,920 crore in the previous fiscal year.

Notably, defence exports have grown 31-fold over the past decade compared to 2013-14. The total value of defence production in India also increased by 17 per cent to Rs 126,887 crore in the last fiscal year.

Moving on to railways and roads, both critical for the Indian economy, the capex target for 2025-26 has been unexpectedly kept unchanged, the budget documents tabled today showed.

But Capital outlay for Railways and Roads are same as last year. Railways capex at Rs 2.52 lakh crore for the next fiscal is the same as it was for the 2024-25.

Similarly, capital outlay for Roads is also maintained at Rs 2.72 lakh crore same as BE and RE of last fiscal 2024-25.