FM Sitharaman delivers massive infrastructure push in Union Budget 2026-27

Finance Minister Nirmala Sitharaman proposed a Rs 12.2 lakh crore infrastructure push in Union Budget 2026-27, focusing on Tier-2/Tier-3 cities, east-west freight corridors, inland waterways, and an Infrastructure Risk Guarantee Fund to boost investment, connectivity, and regional development

New Delhi: Finance Minister Nirmala Sitharaman announced a powerful thrust on infrastructure development in her Union Budget speech for 2026-27, emphasising sustained public investment to drive economic growth and balanced regional progress.

The government will maintain its strong focus on enhancing infrastructure in cities with populations exceeding five lakh, particularly Tier-2 and Tier-3 urban centres that have emerged as vital growth hubs. This shift aims to reduce pressure on major metros, promote equitable development, and unlock economic potential in smaller cities across the country.

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A key highlight was the proposal to raise public capital expenditure to Rs 12.2 lakh crore for the financial year 2026-27. This marks a significant increase from the Rs 11.2 lakh crore allocated in the previous budget, continuing the momentum of infrastructure-led expansion.

The finance minister said that public capex has multiplied manifold since 2014-15, when it stood at around Rs 2 lakh crore, underscoring the government’s commitment to building world-class assets that spur jobs, connectivity, and long-term productivity.

To encourage greater private sector participation in large projects, the minister proposed establishing an “Infrastructure Risk Guarantee Fund”. This initiative will offer partial credit guarantees to lenders, calibrated prudently, to mitigate risks during the development and construction phases.

By de-risking investments, the fund is expected to boost confidence among developers and financial institutions, facilitating the smoother execution of critical infrastructure schemes.

In the logistics and transport sector, the finance minister unveiled plans for a new dedicated freight corridor connecting Dankuni in the east to Surat in the west. This east-west link will promote environmentally sustainable cargo movement, reduce logistics costs, ease road congestion, and enhance efficiency in freight transportation across key industrial belts.

The budget also prioritises inland waterways as a “green alternative” for cargo. The government aims to operationalise 20 new national waterways over the next five years, beginning with National Waterway-5 in Odisha.

This will connect mineral-rich regions like Talcher and Angul, along with industrial hubs such as Kalinganagar, to major ports, including Paradip and Dhamra, strengthening supply chains and supporting export-oriented growth.

Further bolstering the waterways ecosystem, a dedicated ship-repair facility will be set up in Varanasi and Patna. These hubs will cater specifically to inland vessels, fostering local maintenance capabilities, creating skilled employment, and supporting the expansion of river-based logistics in the Ganga-Brahmaputra region.

These announcements align with the broader vision of Viksit Bharat, integrating multimodal connectivity, risk mitigation for investors, and targeted urban-rural linkages.