Finance Minister Nirmala Sitharaman unveiled a Rs 11.21 lakh crore capital expenditure (capex) target for the fiscal year 2026 during her budget presentation on Saturday. This announcement comes despite the government acknowledging a significant shortfall in meeting the current fiscal year's capex goal.
While the FY25 budget allocated Rs 11.1 lakh crore for capex, revised estimates project spending of only Rs 10.18 lakh crore, a shortfall of approximately Rs 93,000 crore. The revised estimate for the FY25 fiscal deficit stands at 4.8% of GDP. Sitharaman explained that the shortfall stemmed from the general election cycle, which effectively paused project implementation for two to three months.
Despite the current year's dip, the FY26 capex target represents a 10% increase compared to the budgeted figure for FY25. When including government grants to states, the total projected capex expenditure for FY26 rises to Rs 15.5 lakh crore.
Coming to 2025-26, the total receipts other than borrowings and the total expenditure are estimated at Rs 34.96 lakh crore and Rs 50.65 lakh crore respectively. The net tax receipts are estimated at Rs 28.37 lakh crore. The fiscal deficit is estimated to be 4.4% of GDP.
To finance the fiscal deficit, the net market borrowings from dated securities are estimated at Rs 11.54 lakh crore. The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 14.82 lakh crore.