Budget 2026: ₹11.1 Lakh Crore for Infrastructure — Roads Got 38%, Railways 29%, Housing Just 9%

Union Budget 2026–27 set a new record for capital expenditure at ₹11.1 lakh crore — up 12.3% from last year's ₹9.88 lakh crore. But the headline number masks significant variation in how the money is distributed across sectors, and a persistent gap between allocation and actual spending that NT has tracked for three consecutive years.

The Allocation Breakdown

Roads and Highways received the largest share at ₹4.22 lakh crore (38%), driven primarily by the National Infrastructure Pipeline and PM Gati Shakti's 31 active expressway corridors. The Ministry of Railways was allocated ₹3.22 lakh crore (29%), with ₹1.08 lakh crore earmarked specifically for safety — driven by the political pressure following the Odisha train collision of 2023. Housing and Urban Affairs received ₹1 lakh crore (9%), which critics say is inadequate given that India needs 25 million more urban housing units by 2031.

The Underspending Problem

“We have consistently shown that capital expenditure announcements are not the same as capital expenditure delivery. The gap between Budget Estimates and Revised Estimates has averaged 18% across infrastructure ministries over the past four years.”

— Dr. Renu Kohli, Senior Fellow, ICRIER

Data from the Controller General of Accounts shows that in 2024–25, the Ministry of Road Transport spent 91% of its BE allocation — one of the better performers. The Ministry of Housing, however, spent only 74% of its allocation, and the Ministry of Ports, Shipping and Waterways spent just 68%. The pattern repeats: ministries with weaker state-level implementation capacity consistently underspend, and those funds lapse back to the Consolidated Fund of India without reaching the ground.