Govt Expenditure on Big Infra Projects to Drive India’s Growth in FY26: Report

The Centre’s significant capital investments in infrastructure projects, including highways, railways, and power, alongside critical sectors like defence, are expected to boost India’s economic growth in FY 2025-26 and beyond, according to a report by Prabhudas Lilladher (PL).

The government allocated ₹11.1 lakh crore for infrastructure in the FY 2024-25 budget, with expectations of an even higher allocation in the upcoming FY 2025-26 budget. These investments aim to stimulate demand and support long-term growth, the report highlights.

The forthcoming budget is anticipated to focus on driving economic recovery by boosting middle-class spending, especially as inflation has eased. The report's optimism is reinforced by industrial growth reaching a six-month high of 5.2% in November, up from 3.5% in October, according to the Ministry of Statistics.