Union Budget 2026–27: Infrastructure And Energy Firms Seek Policy Streamlining, Green Push To Sustain Capex Growth

Mumbai, January 21: While industry experts and executives expect infrastructure-related spending to remain strong, infrastructure and energy firms are seeking more streamlined policies, with increased focus on green and new energy initiatives, industry executives said.

Nirmala Sitharaman, India’s Finance Minister, will make her Budget speech for the upcoming financial year on February 1. Over the last few years, the capital outlay has been robust, in turn boosting infrastructure spending.

With projects in place, industry executives, in addition to sustained spending, are now also seeking a framework to ease project delays, single-window clearances and special focus on certain sub-segments to improve overall project execution.

Capex expectations

In terms of infrastructure spending, India’s Union Budget 2026–27 must sustain the infrastructure-led growth trajectory with a capex outlay near ₹12 lakh crore, reinforcing roads, railways and logistics to unlock economic multipliers, said Jagannarayan Padmanabhan, Senior Director & Global Head – Consulting, Crisil Intelligence.

Those at ICRA expect this capital expenditure target to be set at Rs 13.1 lakh crore for FY2027, entailing around 14 per cent expansion over the expected turnout in FY2026.

Focus on sub-segments

Of these allocations, infrastructure and energy firms remain hopeful of increased focus on certain sub-segments. For instance, Kavita Shirvaikar, Managing Director of Patel Engineering, an engineering, procurement and construction firm, noted: “The industry expects continued emphasis on infrastructure-led growth, with higher allocations for hydropower, transmission and energy storage projects.”

At the centre of these expectations is India’s target of achieving 500 gigawatts of non-fossil energy by 2030. Strategic policy and fiscal support in these areas will be essential to advancing this non-fossil energy target and building robust, future-ready infrastructure, Shirvaikar added.

Calls for higher spending and reforms

Others, such as Vivek Bhatia, Chairman, CII Mining & Construction Equipment Division (MCED), said they are hopeful of higher spending.

“Domestic demand should be sustained through continued investment in infrastructure by the government. In fact, given the robust tax collections and improving fiscal health, this budget is an opportune time to increase capex as a share of government spending.”

Bhatia also listed the introduction of innovation funds for heavy industry, enforcing stricter pre-qualification norms in public sector tenders, and creating compensation frameworks for project delays not attributable to developers as some of the other measures the industry is looking forward to.

Renewable energy expectations

Others from the energy segment noted that the renewable energy sector anticipates measures that streamline regulatory approvals and land acquisition processes for large-scale projects, along with a policy focus on single-window clearances.

Also Watch: