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Finance Minister Nirmala Sitharaman on Sunday, February 1, announced a capital expenditure of Rs 12.2 lakh crore in the Budget for 2026-27 to boost big-ticket infrastructure projects for growth and jobs in the economy.

Presenting the Budget, the Finance Minister said that an Infrastructure Risk Development Fund would be set up to accelerate the development of big projects.

She said that to push economic growth, the Budget proposes to deliver a powerful push to infrastructure, including highways, ports, railways and power projects, scale up manufacturing in seven strategic sectors and create champion MSMEs.

Transport infrastructure gets renewed focus

The minister proposed seven high-speed corridors among various cities and a new dedicated freight corridor between Dankuni in West Bengal and Surat in Gujarat.

According to the minister, these proposed corridors will be developed between Mumbai and Pune, Pune and Hyderabad, Hyderabad and Bengaluru, Hyderabad and Chennai, Chennai and Bengaluru, Delhi and Varanasi, and Varanasi and Siliguri.

Apart from this, proposals include the operationalisation of 20 new national waterways over the next five years.

Urban infrastructure push targets tier 2, tier 3 cities

Urban infrastructure emerged as another priority area in Budget 2026. The government reiterated its plan to develop tier 2 and tier 3 cities as new economic growth hubs.

City Economic Regions will receive structured funding support through challenge-based financing, with Rs 5,000 crore allocated per region over five years to build infrastructure aligned with regional economic strengths.

To strengthen urban financing, incentives have also been introduced for large municipal bond issuances, aiming to reduce reliance on budgetary allocations.

Energy, industrial infrastructure receive targeted support

The Budget announced a Rs 20,000 crore allocation over five years to scale up carbon capture, utilisation and storage technologies across power, steel, cement and refining sectors.

The move is expected to open new capital investment opportunities in clean energy equipment and decarbonisation-related technologies while supporting sustainable industrial growth.

Construction equipment manufacturing

A special scheme for strengthening construction and infrastructure equipment manufacturing was introduced to build domestic capacity. The focus areas include tunnel-boring machines, metro construction equipment, high-altitude road-building machinery and fire-safety systems.

By integrating infrastructure development with local manufacturing, the government aims to reduce import dependence and create a mutually reinforcing cycle between project execution and industrial production.

Fiscal prudence

The government has maintained fiscal prudence and monetary stability while maintaining a strong thrust on public investments, she said, stressing that India must deeply integrate with global markets, export more and attract foreign investment as well.

The Finance Minister said that the government has undertaken comprehensive reforms towards creating employment, boosting productivity and accelerating growth. “Over 350 reforms have been rolled out, and the ‘Reforms Express’ is well on its way, and India will continue to take confident steps towards Viksit Bharat, balancing ambition with inclusion,” she said.