Central govt capex may cross ₹12 lakh crore in upcoming budget for FY27, up 10% YoY: SBI report

Group 1: Government Capital Expenditure - Central government capital expenditure is projected to exceed ₹12 lakh crore in FY27, reflecting a year-on-year growth of approximately 10% [1][2] - Total capital expenditure through the Budget has increased significantly from ₹2.5 lakh crore in FY16 to ₹11.2 lakh crore in FY26, indicating a strong upward trend [2] - Effective capital expenditure, combining budgetary capex and grants, reached ₹15.5 lakh crore in FY26, with total capex rising from ₹7.0 lakh crore in FY16 to ₹19.8 lakh crore in FY26 [4] Group 2: Grants and CPSE Expenditure - Grants for capital asset creation rose from ₹1.3 lakh crore in FY16 to ₹4.3 lakh crore in FY26, demonstrating increased support for asset creation at various government levels [3] - Capital expenditure by Central Public Sector Enterprises (CPSEs) was reported at ₹4.3 lakh crore in FY26, funded through internal and extra-budgetary resources [3] Group 3: Borrowing and Fiscal Management - Net central government borrowing for FY27 is estimated at around ₹11.7 lakh crore, which constitutes nearly 70% of the fiscal deficit, with repayments expected to be around ₹4.60 lakh crore [5] - Gross borrowings at the state level are projected at ₹12.6 lakh crore, with repayments estimated at ₹4.2 lakh crore [5] - The report suggests potential reforms to scale down State Development Loans (SDLs), which could help reduce net State borrowings [6] Group 4: Economic Context and Global Factors - The Union Budget presentation occurs amid heightened global uncertainty, with concerns about the impact of global realignment on financial markets [7] - There are apprehensions regarding crude oil prices and their potential to disrupt the current supply-driven stability, which could affect broader commodity markets [7]