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Centre Plans FY27 Capex Expansion to Include Renewable Energy and Green Tech

The Indian government is considering a strategic expansion of its capital expenditure (capex) framework for FY27 to include climate-friendly sectors, such as renewable energy, green technologies, and AI-linked infrastructure, beyond traditional investments in roads and ports. The move aims to support sustainable long-term growth and align public investment with India’s climate goals.

Senior officials from the Finance Ministry will soon meet with key ministries to identify future-ready sectors with high growth potential. This shift comes as private sector capex remains uneven, prompting the government to sustain momentum through targeted public investment.

The Centre is expected to maintain capex at 3.1% of GDP in FY27, similar to FY26, which allocated Rs11.21 trillion towards infrastructure. Public capital spending has more than doubled from Rs3.11 trillion in FY16 to Rs8.07 trillion in FY25, underscoring the government's continued focus on infrastructure-driven growth.

Experts have welcomed the potential directional shift, noting that investment in areas like hydropower, river-linking, rare earth minerals, and space infrastructure will be critical for India’s next growth phase. The policy underscores India's commitment to economic resilience, green industrialization, and future-ready development.