Road & railway ministries utilise 100% Capex in FY 26

Full Capex Utilization Marks Milestone Achievement

India's Road Transport and Highways Ministry and the Railway Ministry have scripted history by exhausting 100% of their capital expenditure (Capex) budgets in the fiscal year 2026, which concluded on March 31.

This unprecedented feat comes at a time when government spending on infrastructure has been a key driver of economic recovery and growth, showcasing efficient project execution amid challenging economic conditions. Officials attribute this success to streamlined tendering processes, dedicated monitoring mechanisms, and a surge in private sector participation through public-private partnerships. For the Roads Ministry, this meant deploying funds towards expanding national highways, building expressways, and upgrading border roads, while Railways focused on electrification, high-speed corridors, and station redevelopment.

The achievement underscores a shift from previous years where underspending was common due to land acquisition delays, environmental clearances, and contractor issues. In FY26, the Roads Ministry's Capex target of around Rs 2.8 lakh crore was met through accelerated construction of over 12,000 kilometers of highways, including critical projects like the Delhi-Mumbai Expressway. Similarly, Indian Railways utilized its Rs 2.65 lakh crore allocation to lay 6,000 kilometers of new tracks and electrify 95% of its broad-gauge network, reducing dependency on imported fuel.

Boost to Economy and Job Creation

This full Capex utilization is expected to have a multiplier effect on the economy, generating millions of direct and indirect jobs across construction, manufacturing, and logistics sectors. Infrastructure spending of this scale not only improves connectivity but also enhances logistics efficiency, potentially lowering transportation costs by up to 10-15% in the coming years. Experts point out that better roads and rail networks will decongest urban areas, facilitate trade, and support the government's vision of a $5 trillion economy.

Small towns and rural areas have particularly benefited, with new highway spurs connecting remote regions to major markets, boosting agricultural exports and tourism. Railways' initiatives like Vande Bharat train expansions have improved passenger comfort and speed, carrying over 1.5 billion passengers this year alone without major disruptions.

"The complete absorption of Capex by both ministries reflects our commitment to 'Sabka Saath, Sabka Vikas' – it's a testament to teamwork between central and state governments, and the hard work of our engineers and workers who toiled day and night to deliver results," said a senior official from the Finance Ministry.

Challenges Overcome and Future Outlook

Achieving 100% utilization wasn't without hurdles; ministries grappled with inflationary pressures on cement and steel prices, monsoon-related delays, and geopolitical supply chain disruptions. Yet, innovative measures like digital project monitoring via the Dashboard portal and fast-track approvals turned the tide. The Roads Ministry resolved over 90% of stalled projects, while Railways introduced dedicated freight corridors that now handle 20% more cargo.

Looking ahead, this momentum is set to continue into FY27 with even higher Capex targets, focusing on sustainable infrastructure like green highways and solar-powered stations. Policymakers emphasize that sustained full utilization will be crucial for Atmanirbhar Bharat, promoting domestic manufacturing of rolling stock and construction equipment. Stakeholders from industry chambers have welcomed the development, urging replication across other sectors.

In summary, the Road and Railway Ministries' 100% Capex utilization in FY26 highlights exemplary fiscal discipline, accelerates India's infrastructure revolution, and lays a strong foundation for long-term economic prosperity.