Budget: 10% increase in capex allocation likely for road, railways ministries in FY26

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Subscribe to enjoy similar stories. New Delhi: The Centre proposes to keep its focus on rapid infrastructure growth in the next financial year, with plans to push capex allocation for the ministries of road transport and highways, and railways in the upcoming budget by upto 10%, two persons aware of the development said.

The proposed modest increase comes in the backdrop of the government targeting a big increase in private investments into the highway sector in projects being awarded under the build-operate-transfer (BoT) toll model. Also, the railways will continue implementing existing projects with a focus on capacity augmentation and safety measures that will not require any additional capital.

Meanwhile the spending on manufacturing new generation trains such as Vande Bharat would be made in a staggered manner that reduces the pressure on capex in a particular year. Also read | India rate-setter sees growth picking up on govt capex in coming quarters “We are expecting 20-25% of highways project awards next year to be on BoT (toll) model.

This would relieve pressure on the government to spent on its own for such infrastructure development. The money will continue to be spent by the government but with more private investors, central capex could go into more critical infrastructure projects and ones that have strategic interest attached to it.

Also, government capex be used in maintaining existing highway network and make them safer for movements," said the first person quoted above. BoT (toll) projects allow private sector bidders to take construction risk and invest in developing road projects, thereby relieving pressure on the government to make additional capital investments to keep up the building momentum.