Economic Survey 2026: Infrastructure Sector Milestones & Future Outlook

Infrastructure investment continues to play a decisive role in India’s growth strategy, as highlighted in the Economic Survey 2026. Since FY 2019-20, Union Budget priorities have consistently shifted toward large-scale public capital expenditure. These are further supported by integrated planning and systemic upgrades across logistics and connectivity networks. This period has marked the expansion of traditional infrastructure such as roads, railways, ports, and power systems, along with the rapid development of digital public infrastructure and renewable energy assets.

Let’s delve into the key highlights of the Economic Survey 2026 for the infrastructure sector to explore its detailed insights.

Also Read: Economic Survey 2026: Key Insights and Growth Outlook for the Industrial Sector

CapEx and Financing Landscape

Capital Expenditure Momentum: The Government of India has significantly scaled up capital outlay in recent years, recognising its strong multiplier effect on economic activity. Capital expenditure increased by nearly 89%, rising from 5.92 Lakh INR-Crore in FY 2021-22 to a budgeted 11.21 Lakh INR-Crore in FY 2025-26. This sustained push has strengthened project execution capacity while crowding in private investment across infrastructure segments.

Infrastructure Financing: Meanwhile, India’s infrastructure financing ecosystem is undergoing a structural transition. Historically reliant on bank credit, the sector is now moving toward diversified funding mechanisms, including capital market instruments, infrastructure investment trusts (InvITs), and alternative financing vehicles. This shift has improved financial resilience and reduced pressure on the banking system.

Public-Private Partnerships (PPPs): Private sector participation remains a key pillar of infrastructure development. According to the World Bank’s Private Participation in Infrastructure (PPI) Report 2024, India consistently ranks among the top five countries globally for private investment in infrastructure among low- and middle-income economies. Domestically, this trend is reflected in the rising number of projects approved by the Public-Private Partnership Appraisal Committee (PPPAC), reinforcing investor confidence.

Urban Infrastructure

Housing: PMAY-U Progress

Under the Pradhan Mantri Awas Yojana – Urban (PMAY-U), housing delivery has continued at scale. As of 24 November 2025, authorities have sanctioned 122.06 Lakh houses nationwide. Of these, 96.02 Lakh houses have already been completed and handed over to beneficiaries. This progress reflects sustained policy focus on affordable urban housing, as highlighted in the Economic Survey 2026.

Urban Mobility: Metro and RRTS Expansion

India has significantly expanded its mass rapid transit network over the past decade. As of 2025, around 1,036 Km of Metro and RRTS corridors are operational across nearly 24 cities, with several additional routes under construction.

Smart Cities Mission: Project Execution at Scale

The Smart Cities Mission (SCM) remains one of India’s most ambitious urban transformation programmes. Launched in 2015, the mission focuses on smart roads, non-motorised transport, command-and-control centers, upgraded water and sewerage systems, and improved public spaces. As of  May 9, 2025, cities under SCM have completed over 90% of the roughly 8,067 approved projects. Nearly 1.64 Lakh INR-Crore has been invested so far, underscoring strong execution momentum, as outlined in the Economic Survey 2026.

Roads & Highways

Sustained investment and policy reforms have significantly expanded the National Highway network over the past decade. For FY 2025-26, the government has targeted the construction of 10,000 Km of highways, of which 4,938 Km has been completed as of 31 December 2025. Improved construction pace and corridor development continue to enhance freight movement and regional connectivity.

Railways

Indian Railways remains central to India’s infrastructure landscape. Network expansion, asset modernisation, and enhanced multimodal integration have strengthened its role in both passenger and freight movement. As of March 2025, the rail network has expanded to 69,439 route Km, supporting higher capacity and operational efficiency.

Airports

India has emerged as the world’s third-largest domestic aviation market. The number of operational airports has more than doubled, increasing from 74 in 2014 to 164 in 2025. This expansion reflects rising air travel demand and sustained investment in airport infrastructure.

Ports & Shipping

Power & Renewable Energy

Water Infrastructure

Jal Jeevan Mission (JJM)

Launched to ensure safe drinking water access in rural areas, the Jal Jeevan Mission has significantly expanded tap water coverage across India. At the time of launch, only 3.23 Crore rural households, about 17%, had functional tap connections. By 20 November 2025, over 12.50 Crore additional households were covered. This pushed total coverage to nearly 15.74 Crore households, or 81.31% of rural homes.

Beyond infrastructure creation, JJM has delivered measurable social and health benefits. Independent assessments highlight a sharp reduction in the number of women fetching water from outside their homes. According to SBI Research, this has increased women’s participation in agricultural and allied activities, directly improving household productivity and living standards.

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Conclusion and Outlook

India’s infrastructure development continues to act as a critical growth enabler amid global uncertainty. Sustained investments across transport, urban housing, ports, power, and digital infrastructure have strengthened economic resilience and improved service delivery. Large-scale programmes such as PMAY-U, AMRUT, the Smart Cities Mission, and metro and rapid rail expansion reflect a clear shift from asset creation to outcomes-based infrastructure development. Simultaneously, capacity expansion in ports, logistics, and power is improving efficiency and reducing systemic bottlenecks. As the Economic Survey suggests, the effectiveness of infrastructure-led growth will depend on timely execution, inter-agency coordination, and sustained private sector participation, particularly through PPP models. Together, these factors position infrastructure as a long-term driver of productivity, urban liveability, and inclusive economic growth.

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