Infrastructure: Looking past budget blues

The recent budget disappointed investors in infrastructure stocks. While capital expenditure is budgeted to grow by 10.1 per cent YoY vs FY25RE to Rs 11.2 trillion, it remains flattish vis-à-vis FY25BE, with the government undershooting its FY25 target by around Rs 900 billion. No change was made to capex outlay for either roads (Rs 2.7 trillion in FY26BE) or railways (Rs 2.5 trillion in FY26BE), which had hitherto seen large increases. The budget did see measures to increase private sector participation and measures to increase state government participation through credit enhancement and soft loans.

This article was originally published on March 01, 2025.