SBI Report: Govt Capex to Cross ₹12 Lakh Crore in FY27

Current Context: The SBI Research report Prelude to Union Budget 2026-27 (part of the Ecowrap series) was released on 27 January 2026 by Group Chief Economic Advisor Dr. Soumya Kanti Ghosh.

• It projects central government capital expenditure to cross ₹12 lakh crore in FY27, a 10% YoY increase, continuing India’s infrastructure-led growth.
• The report estimates the fiscal deficit at 4.2% of GDP, with nominal GDP growth of 10.5–11% and net borrowing around ₹11.7 trillion.
• It also highlights the rising trend of capital spending and recommends reforms such as tax parity for bank deposits with capital gains and reducing FD lock-in periods to 3 years.
• Overall, it emphasizes fiscal consolidation alongside sustained investment in national assets.

Question:

Q.1 What is the projected year-on-year growth rate of central government capital expenditure for FY27 as per the SBI Research report “Prelude to Union Budget 2026–27”?
a) 8%
b) 10%
c) 14%
d) 12%

Answer: b) A 10% YoY increase in capex reflects the government’s continued focus on asset creation.