Despite geopolitical shocks, India's capex plan remains unaffected, says union expenditure secretary

Despite all the fiscal stress caused by the geopolitical crisis in the Middle East and elsewhere, the Central government will try to keep its Capital expenditure plans for the year on track, Vumlunmang Vualnam, secretary, department of expenditure, ministry of finance has said.

Participating in a panel discussion on the macroeconomic priorities of the government at the Second Edition of the Annual Growth Conference 2026  of the Isaac Centre for Public Policy (ICPP) at Ashoka University in Delhi, Vualnam said infrastructure sectors like highways, railways, shipping, ports, and urban development sectors would be the focus areas for the capital expenditure during the current financial year. The upcoming few months, the next quarter and the year ahead would be very difficult to envisage with lots of possible stress points, he said.

“The fiscal stress is indeed very much a reality, but at the same time the CAPEX would really be a priority item which we would like to preserve and ensure that it continues at the budgeted level.” 

The session, moderated by N K Singh, former member of Rajya Sabha, and chairman, 15th Finance Commission,  examined a global environment marked by rising uncertainty, supply shocks, and volatility in growth, inflation, and trade, and assessed how these external disruptions are impacting India’s fiscal outlook and macroeconomic stability.

Speaking at a special session later during the day, Poonam Gupta, deputy governor, Reserve Bank of India (RBI) said  India has the strength to handle global shocks. “I remain quite confident and optimistic that India’s balance of payments has inherent structural strengths driven by three key components: solid remittances of over $135 billion, strong net services exports, and steady FDI inflows. These are not cyclical but structural trends, which means that even if shocks occur and some years are more challenging, the underlying strength will sustain and the economy will return to its growth path”, she said.

Stressing more on the strengths of the Indian economy, Gupta added, “In the last few years, India has grown at around 7.5% with inflation below 4%, which shows the underlying strength of the economy. This gives me confidence that we have the potential to sustain even higher growth than 7.5% in a non-inflationary manner.

In his address, Arunish Chawla, secretary, department of investment and public asset management, ministry of finance,  highlighted seven key areas such as value-added agriculture, R&D and deep tech, strengthening health and education, unlocking the cultural and creative economy, and building a circular and sustainable economy, among others as critical priorities to drive jobs and growth over the next decade.

The two days conference will see discussions centred on India’s macroeconomic landscape amid global headwinds, the role of regulation and cost of capital, and India’s positioning in an evolving global trade environment.