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Budget 2026 Boosts Infra Capex to Rs 12.2 Lakh Cr, Doubles Monetisation Target

The Union Budget 2026-27 has increased public capital expenditure to Rs 12.2 lakh crore, with an 8% higher allocation for roads and highways. Experts note the budget doubles the asset monetisation target to Rs 30,000 crore, primarily via toll-operation-transfer and infrastructure investment trusts. This strategic shift aims to catalyze private sector participation and recycle assets to fund new projects. Finance Minister Nirmala Sitharaman also proposed accelerating the recycling of CPSE real estate assets through dedicated REITs.

Key Points: Budget 2026: Infra Capex Hike & Doubled Monetisation Target

  • 8% hike in MoRTH allocation
  • Monetisation target doubled to Rs 30,000 crore
  • Reliance on TOT and InvIT routes
  • Strategic recycling of CPSE real estate via REITs
2 min read

More focus on monetisation reflects approach to funding infra projects by catalysing private sector participation: Crisil Ratings

Union Budget 2026-27 raises public capex to Rs 12.2 lakh crore and doubles asset monetisation target to Rs 30,000 crore to fund infrastructure.

"increased focus on monetisation reflects a strategic approach to funding infrastructure projects by catalysing private sector participation - Anand Kulkarni, Crisil Ratings"

New Delhi, February 1

The Union Budget 2026-27, presented in Parliament on Sunday, has increased public capital expenditure to Rs 12.2 lakh crore in FY 2026-27, with industry experts saying that the increased outlay will revitalise project pipelines.

Anand Kulkarni, Director at Crisil Ratings, pointed out that the 8 per cent increase in allocation for the Ministry of Road Transport and Highways (MoRTH), is a "salutary" step for the industry. The focus is expected to translate into tangible progress on the ground very soon, he said.

Kulkarni noted that the fiscal support would lead further pick-up in new project awarding and execution.

Beyond direct budgetary support, the government is leaning heavily on innovative financing to sustain this growth. The strategy involves recycling existing assets to fund new ones, a move that experts believe is essential for long-term fiscal health. Commenting on the role of InvITs, Kulkarni mentioned that growth in the roads sector "will be significantly driven by higher reliance on monetisation of assets."

The scale of this shift is evident in the doubling of the monetisation target. Kulkarni highlighted that the budget for monetisation, primarily through the toll-operation-transfer (TOT) and infrastructure investment trusts (InvIT) routes, "has doubled to Rs 30,000 crore from the previous budgeted Rs 15,000 crore," matching the revised targets of the current fiscal year. He noted that this "increased focus on monetisation reflects a strategic approach to funding infrastructure projects by catalysing private sector participation."

In her budget speech, Finance Minister Nirmala Sitharaman said that over the years, REITs have emerged as a successful instrument for asset monetisation.

"I propose to accelerate recycling of significant real estate assets of CPSEs through the setting up of dedicated REITs," she said.

- ANI

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Reader Comments

P
Priya S
Good to see focus on roads! My hometown finally got a proper highway connection last year and it has changed everything for local businesses. ₹12.2 lakh crore is a huge number, hope it reaches all corners of the country, not just the big cities. 🙏
R
Rohit P
Monetisation through InvITs and REITs sounds good on paper, but I'm a bit wary. We must ensure public assets aren't just sold off for short-term gains. The "recycling" should genuinely lead to new, better infrastructure for citizens, not just become a financial exercise for funds.
S
Sarah B
As someone working in finance, the doubling of the monetisation target to ₹30,000 crore is a very significant signal to global investors. It shows a structured, mature approach to funding. This could attract a lot of long-term capital into Indian infra if managed transparently.
V
Vikram M
More roads are always welcome, but what about maintenance? We build new ones but existing highways are full of potholes. Hope part of this budget and the private participation model includes strict maintenance clauses. Jai Hind!
K
Karthik V
The strategic shift is clear. Instead of the government bearing all the cost and risk, they are creating a framework for private players to invest and operate. This is how developed economies do it. Fingers crossed for successful implementation on the ground.

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