Presenting the Union Budget 2026–27 in Parliament, Union Finance and Corporate Affairs Minister Nirmala Sitharaman said the government’s first responsibility, or kartavya, is to accelerate and sustain economic growth.
“Our first kartavya is to accelerate and sustain economic growth, by enhancing productivity and competitiveness, and building resilience to volatile global dynamics,” Sitharaman said.
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The Finance Minister said public capital expenditure (capex) has increased manifold over the past decade—from ₹2 lakh crore in FY2014–15 to ₹11.2 lakh crore in BE 2025–26.
For FY2026–27, the Budget proposes to raise public capex further to ₹12.2 lakh crore to maintain investment momentum.
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She added that the government has expanded public infrastructure through new financing instruments such as Infrastructure Investment Trusts (InVITs) and Real Estate Investment Trusts (REITs), as well as institutions like NIIF and NABFID. Over time, REITs have emerged as a successful tool for asset monetisation.
The Budget proposes to accelerate the recycling of significant real estate assets of CPSEs through the creation of dedicated REITs.
Infrastructure Risk Guarantee Fund Proposed
To boost private sector confidence during the construction phase of infrastructure projects, Sitharaman proposed setting up an Infrastructure Risk Guarantee Fund.
The fund will provide prudently calibrated partial credit guarantees to lenders, helping mitigate development and construction risks.
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To promote environmentally sustainable cargo transport, the Budget proposes a new Dedicated Freight Corridor connecting Dankuni in the East to Surat in the West.
It also proposes to operationalise 20 new National Waterways over the next five years, beginning with National Waterway-5 in Odisha, which will connect the mineral-rich regions of Talcher and Angul with industrial hubs like Kalinga Nagar, and ports at Paradeep and Dhamra.
To raise the share of inland waterways and coastal shipping from 6% to 12% by 2047, Sitharaman announced a Coastal Cargo Promotion Scheme to incentivise a shift from road and rail.
She added that training institutes will be developed as Regional Centres of Excellence along waterways to build skilled manpower. A ship repair ecosystem for inland waterways is also proposed at Varanasi and Patna.
Seven High-Speed Rail Corridors Announced
To promote sustainable passenger transport, the Budget proposes seven high-speed rail corridors as “growth connectors”:
- Mumbai–Pune
- Pune–Hyderabad
- Hyderabad–Bengaluru
- Hyderabad–Chennai
- Chennai–Bengaluru
- Delhi–Varanasi
- Varanasi–Siliguri
Seaplane VGF Scheme for Connectivity and Tourism
To improve last-mile and remote connectivity and promote tourism, Sitharaman proposed incentives for indigenised seaplane manufacturing.
A Seaplane Viability Gap Funding (VGF) Scheme will be introduced to support operations.
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Aligning with the CCUS roadmap launched in December 2025, the Budget proposes an outlay of ₹20,000 crore over the next five years to scale up Carbon Capture, Utilisation and Storage (CCUS) technologies.
These technologies will be deployed across five industrial sectors—power, steel, cement, refineries and chemicals.
Focus on City Economic Regions
Calling cities India’s engines of growth and innovation, Sitharaman said the government will now focus on Tier II and Tier III cities, including temple towns, which require modern infrastructure and amenities.
The Budget proposes mapping City Economic Regions (CERs) based on specific growth drivers, with an allocation of ₹5,000 crore per CER over five years for implementation.
