PSU Capex 2026: CPSEs Hit 99% of FY26 Target | ₹12.2 Lakh Crore FY27 Push

India’s Public Sector Undertakings (PSUs) and Central Public Sector Enterprises (CPSEs) have once again demonstrated strong execution muscle. As the fiscal year 2025-26 (FY26) draws to a close, CPSEs have spent ₹7.40 lakh crore till March 2026 — touching over 99% of the revised annual target of ₹7.47 lakh crore. This marks the fourth straight year of capex targets being met or exceeded, according to official data released earlier this month.

The momentum comes at a critical time. Just weeks after the Union Budget 2026-27 presentation, the government has set a fresh benchmark: ₹12.2 lakh crore in public capital expenditure for FY27 (2026-27). This represents a nearly 10% jump from the previous fiscal’s ₹11.2 lakh crore allocation and reinforces the Centre’s infrastructure-led growth strategy amid global uncertainties.

CPSE Capex FY26: Near-Target Achievement with One Month to Go

Data from the Department of Public Enterprises shows that 60 major CPSEs and four key government organisations (including Railway Board and NHAI) have already utilised ₹7.39–7.40 lakh crore by February-end 2026. February alone saw a robust ₹72,000 crore outflow — the second-highest monthly spend of the year.

Key highlights:

Revised target lowered from ₹7.85 lakh crore to ₹7.47 lakh crore for better alignment.
Energy sector leaders like NLC India, Hindustan Petroleum, and NTPC topped the charts.
NHAI overshot its target at 120%, while Railway Board reached 90%.
Overall government capex (including CPSEs) grew 11% in April-January compared to the previous year.

This strong performance is expected to push final FY26 spending past the target, continuing the streak that began in FY23.

Union Budget 2026-27: ₹12.2 Lakh Crore PSU Capex Blueprint

Finance Minister Nirmala Sitharaman’s Budget 2026-27 has prioritised capex to drive industrial infrastructure and energy security. The ₹12.2 lakh crore allocation is designed to crowd in private investment while supporting “Make in India” and green transition goals.

Sector-wise Breakdown (Key Allocations for FY27):

Energy — ₹1.33 lakh crore for ONGC, NTPC, and IOCL projects (green energy and refinery expansion).
Railways — ₹2.80 lakh crore for 7 new high-speed corridors and rolling stock modernisation.
Defence — ₹1.85 lakh crore focused on domestic procurement (HAL, BEL, and other defence PSUs).
Electronics & Manufacturing — ₹40,000 crore under the Electronics Components Scheme.
Additional schemes: ₹10,000 crore each for Biopharma SHAKTI, SME Growth Fund, and indigenous container manufacturing.

Disinvestment proceeds are targeted at ₹80,000 crore, including strategic stake sales in IDBI Bank and select shipping/rail entities. Proceeds will directly fund the capex push without straining the fiscal deficit (pegged at 4.3% for FY27).

Economic Impact and Outlook for 2026-27

Analysts note that sustained PSU capex is critical at a time when private sector investment intentions dipped 25% in FY26. Public spending continues to act as a growth anchor, creating jobs in engineering, construction, and ancillary sectors while boosting order books for domestic manufacturers.

PSU profits are also on track to cross ₹2 lakh crore in FY26, providing healthy dividends to the exchequer. Market capitalisation of listed PSUs has already neared ₹70 lakh crore, led by banking, energy, and defence giants.

Looking ahead, the government is encouraging CPSEs to align capex with key performance indicators (KPIs) such as return on net worth, export share, and asset turnover. With one month left in FY26, officials remain confident of full target achievement — setting a solid base for the even bigger FY27 push.

Bottom Line: PSU Capex remains the backbone of India’s infrastructure story. Whether you track CPSE spending, defence modernisation, or railway expansion, the numbers for March 2026 confirm one clear trend — public capital expenditure is not just steady, it is scaling new highs.

Stay tuned for monthly updates as final FY26 figures are released in April. For investors and industry stakeholders, the ₹12.2 lakh crore FY27 roadmap signals strong opportunities in PSU-linked stocks and projects.