Budget 2026-27: Infrastructure Priorities for Roads, Power, and Railways
Union Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on Sunday, 1 February 2026. This crucial financial blueprint was unveiled amidst ongoing geoeconomic disruptions that continue to impact India's growth trajectory. With these challenges expected to persist into the coming fiscal year, the budget provides critical insights into the government's strategic response to pressing national concerns.
This detailed analysis forms part of a comprehensive five-part series that utilizes visual charts to evaluate the Budget 2026's approach across 15 key areas. The current installment focuses specifically on three critical infrastructure sectors: roads, power, and railways. Each topic is explored through a pair of illustrative charts—one depicting the contextual challenges faced and another showcasing the budgetary provisions delivered.
Roads: A Strategic Shift Towards Quality and Consolidation
Speedy highway construction has long been the cornerstone of the Narendra Modi government's infrastructure-led growth model. However, recent data reveals a notable decline in the pace of national highway construction. From a peak of 36.5 kilometres per day in 2020-21, the rate has slowed to approximately 17.1 km per day in 2025-26.
This deceleration may signal a deliberate strategic shift towards consolidation, indicating that the massive expansion phase might be giving way to a focus on enhancing existing networks. The government is simultaneously planning ambitious projects, including a sequel to the Golden Quadrilateral—a proposed network of high-speed expressways designed to connect India's major economic hubs more efficiently.
- Highway construction pace has halved since 2020-21 peak
- Focus shifting from quantity to quality and network integration
- New expressway projects aimed at boosting economic connectivity
Power Sector: Addressing the Discom Dilemma Through Reforms
Electricity distribution companies, commonly known as discoms, remain under significant financial strain. Their accumulated deficit has widened dramatically from around ₹4.1 trillion in 2016-17 to nearly ₹6.9 trillion in 2023-24. This persistent stress stems from multiple factors:
- High technical and commercial losses
- Delayed tariff revisions
- Growing subsidy burdens
The government's policy response has evolved from periodic bailouts to reform-linked financial support. A substantial portion of the budgetary allocation is now channeled through the Revamped Distribution Sector Scheme, which aims to:
- Promote widespread adoption of smart metering
- Reduce aggregate technical and commercial losses
- Address structural inefficiencies in power distribution
- Enhance long-term financial sustainability of the sector
Railways: Balancing Expansion with Safety Imperatives
Indian Railways continues to receive significant attention in infrastructure spending. However, safety considerations have taken center stage following the tragic 2023 Balasore collision that claimed approximately 350 lives. Budgetary investments are being directed toward several critical areas:
- Track renewals and modernization
- Signaling system upgrades
- Rolling stock maintenance and improvement
- Nationwide rollout of the indigenous Kavach automatic train protection system
Despite these initiatives, spending on safety measures has remained largely stagnant at about 20% of total railway expenditure. This raises important questions about whether current allocations are sufficient to address the safety requirements of an expanding network and growing passenger volumes.
The Budget 2026-27 thus presents a nuanced approach to infrastructure development, balancing expansion ambitions with quality enhancement in roads, addressing structural reforms in the power sector, and attempting to prioritize safety within railway investments. As India navigates complex economic challenges, these allocations will play a crucial role in shaping the nation's infrastructure landscape for years to come.
