E-Paper
Budget 2026–27: Infrastructure and jobs as drivers of growth
This article is authored by Naina Lal Kidwai, chairperson, India Sanitation Coalition, New Delhi.
The government’s continued commitment to the fiscal glidepath while increasing capital expenditure to ₹12.2 lakh crore, strikes a careful balance between discipline and growth.
Public capital expenditure remains the principal economic multiplier with Investments in transport corridors, logistics networks, industrial clusters and urban infrastructure all designed to reduce transaction costs, improve productivity and crowd in private investment. This is particularly relevant as global firms diversify supply chains and seek destinations that offer scale, reliability and policy continuity. India’s push into semiconductors, capital goods, biopharma, electronics, strategic minerals and rare earth reinforces its ambition on de-risking supplies and growing exports
The Budget has highlighted the need for cluster development of cities and urban infrastructure, particularly water, sanitation and wastewater management. By embedding water supply, sanitation, drainage and wastewater within broader urban infrastructure and financing frameworks, the Budget recognises that Reliable WASH systems underpin labour productivity, industrial efficiency, public health and real estate viability.
The Budget has sharply increased funding for the Department of Water Resources, River Development and Ganga Rejuvenation by 17%, raising the outlay from ₹21,640.88 crore in FY 2024–25 to ₹25,276.83 crore. Within this, allocations for river cleaning and basin-level management were strengthened, with the National Ganga Plan receiving a 13% increase and the River Basin Management scheme seeing a 70% jump, signalling a broader focus beyond the Ganga to other river systems, even as funding for the National River Conservation Plan for other basins declined marginally by 6%. A particularly notable shift is the 57% increase in the Water Resources Management Scheme, which covers groundwater management and regulation, the National Hydrology Project, the Atal Bhujal Yojana, water information systems, and the National Water Mission—reflecting a growing emphasis on data-driven water governance and long-term sustainability. Most significantly, the Jal Jeevan Mission (JJM) outlay rose by 198%, underscoring the government’s commitment to rural water security. Since 2019, 15 crore rural households—around 80% of India’s rural population—have gained access to potable tap water, and the extension of JJM to achieve 100% coverage by 2028 positions safe drinking water as a core public infrastructure priority rather than a welfare intervention.
As JJM moves closer to universal coverage, the policy challenge will shift decisively towards service reliability, groundwater sustainability, and wastewater management, especially in fast-urbanising regions.
The Budget proposes developing City Economic Regions (CERs) to promote integrated planning across cities and their peri-urban and hinterland areas. These regions are intended to align infrastructure investment, economic activity, housing, and mobility beyond municipal boundaries, supporting productivity, job creation, and coordinated urban growth.
This signals a shift from city-centric planning to regional economic clusters, with implications for metropolitan governance, service delivery, and infrastructure financing.
The Budget encourages the use of municipal bonds as a financing instrument for urban infrastructure. Measures to deepen the municipal bond market are intended to improve creditworthiness, attract private capital, and reduce reliance on grants for urban infrastructure development. This creates opportunities for financing water, sanitation, wastewater, and climate-resilient urban infrastructure through market-based mechanisms.
The Budget emphasises job creation and skilling and capacity-building. Health care sector includes training for healthcare professionals, paramedical staff, and allied health workers, to support the expansion of health infrastructure and address workforce gaps. Mention of medical tourism will also creates jobs and require these skills
The Budget proposes developing 12 archaeological sites as cultural centres to enhance heritage conservation, promote tourism, and strengthening local economies. Developing Buddhist trails in the Northeast and trekking trails in our hills are expected to serve as anchors for cultural tourism, generating employment and supporting allied services such as hospitality, crafts, and local enterprises.
Taken together, Budget 2026–27 makes a clear statement: India’s growth story will be built on disciplined public finance, skilled people and cities that work. By focusing on institutions, infrastructure and human capability, the Budget reinforces India’s position as a resilient and investible economy. The task now is disciplined execution.
This article is authored by Naina Lal Kidwai, chairperson, India Sanitation Coalition, New Delhi.
