India Government Capital Expenditure Rises 19 Percent in Early 2026

Government capital expenditure in India grew by 19 percent year-on-year during April and May 2026. According to a report by Nuvama, this growth was fueled by a 13 percent rise in central government spending, a 9 percent increase in state government spending, and a 26 percent surge in expenditures by central public sector enterprises, which totaled Rs 2.1 trillion in the first quarter of FY27.

While the increased public spending suggests stronger cement demand for the 2027 fiscal year, other sectors show volatility. Residential launch volumes in the housing sector declined 14 percent year-on-year during the same period. Furthermore, the onset of the monsoon season has created uneven cement demand, with strong activity in the South and West but subdued levels in other regions.

Input costs remain a significant concern for the industry. Petcoke prices are higher than they were in the fourth quarter of FY26, a trend Nuvama predicts will affect cement costs and stock prices throughout the remainder of the first and second quarters of FY27.