As India prepares for Budget 2026, the spotlight is firmly on infrastructure output and private investment. Despite mixed results in the core sector, the country’s economic resilience is being shaped by manufacturing growth, capital expenditure, and a surge in private participation.
Looking back at Budget 2025, India allocated ₹11.21 lakh crore for infrastructure, representing nearly 3.4% of GDP. On the technology front, the government emphasized bridging the digital divide, investing in emerging tech, innovation, and deep tech. These allocations laid the groundwork for the momentum we see today.
This blog explores how Budget 2026 is expected to build on last year’s foundation, driving infrastructure expansion, attracting private investment, and reinforcing India’s economic resilience.
Read: Top Trends in 2026 That Will Define India’s Tech Adoption
1. Infrastructure Output: The Backbone of Growth
- Budget 2025 recap:
- Capital expenditure for infrastructure was raised to ₹11.21 lakh crore, up from ₹10 lakh crore in 2024.
- Focus areas included roads, railways, logistics, and urban development.
- 2026 outlook:
- Continued emphasis on megaprojects in highways, ports, and renewable energy.
- Expansion of urban infrastructure to support smart cities and housing.
- Impact: Infrastructure remains the engine of India’s growth, enabling manufacturing, trade, and digital connectivity.
2. Private Investment Surge
- Trend: Private sector participation is accelerating through Toll-Operate-Transfer (TOT) models, Hybrid Annuity Models (HAM), and PPP frameworks.
- 2026 outlook:
- Increased private capital in renewable energy, logistics, and industrial corridors.
- Greater collaboration between domestic firms and global investors.
- Impact: Private investment reduces the government’s fiscal burden while ensuring efficient project execution.
3. Manufacturing as a Growth Driver
- Budget 2025 recap: Manufacturing was supported by PLI schemes and infrastructure expansion.
- 2026 outlook:
- Manufacturing output is expected to rise, driven by semiconductors, electronics, and green technologies.
- Infrastructure growth provides the backbone for industrial clusters and export hubs.
- Impact: Manufacturing strengthens India’s position as a global supply chain player.
4. Technology Allocation in Budget 2025
- Key highlights:
- Bridging the digital divide through rural connectivity and localized content.
- Investment in emerging tech, innovation, and deep tech.
- Integration of technology solutions across sectors—from agriculture to healthcare.
- Impact: These measures laid the foundation for AI adoption, digital services, and smart infrastructure.
5. Mixed Core Sector Results
- Challenge: Core sector growth in 2025 was uneven, with strong performance in steel and cement, but weaker results in coal and crude oil.
- 2026 outlook:
- Renewed focus on renewables and sustainable energy.
- Diversification of supply chains to reduce dependency on volatile sectors.
- Impact: Mixed results highlight the need for balanced growth strategies.
6. Policy & Regulation: Guardrails for Expansion
- Budget 2025 recap: Policies encouraged private participation and FDI inflows.
- 2026 outlook:
- Continued emphasis on ease of doing business.
- Stronger frameworks for sustainability and ESG compliance.
- Impact: Policy clarity ensures long-term investor confidence.
7. Opportunities for Businesses & Investors
- Businesses: Align with government priorities in infrastructure and manufacturing.
- Investors: Focus on PPP projects, renewable energy, and industrial corridors.
- Tech firms: Leverage digital infrastructure to expand services in rural and urban markets.
8. Risks & Challenges
- Supply chain volatility: Global uncertainties may affect raw material availability.
- Fiscal constraints: High capital expenditure could strain government finances.
- Execution risks: Delays in megaprojects may impact timelines.
Read: India Inc Outlook 2026: Startup IPOs & AI-Led Growth
Budget 2026 represents a pivotal moment for India’s economy. With infrastructure output surging, private investment accelerating, and manufacturing gaining strength, India is poised to reinforce its economic resilience.By building on Budget 2025’s allocations in tech and infrastructure, the government is ensuring that growth is inclusive, sustainable, and future-ready. For Drita’s audience, this outlook connects the dots between infrastructure expansion and economic resilience, showcasing how India is preparing for its next leap forward.