Public capital expenditure should gradually be brought closer to 3 per cent so that more financial resources are available for the private sector,” a source told Moneycontrol. In the FY26 Budget, the government budgeted around ₹11.21 lakh crore for capital expenditure, higher than 3 per cent of GDP. “Household financial savings have fallen from around 10 to 10.5 per cent of GDP earlier to about 7 to 7.5 per cent now. The person added that sustained high public capex, combined with falling household savings, was tightening liquidity and raising bond yields. “Private capital expenditure is ultimately more efficient than public capex.

Source: The Telegraph December 31, 2025 09:39 UTC