The Indian economy has not returned to its earlier high investment equilibrium. Despite a decade of corporate tax reductions, insolvency reforms and production-linked incentives, private corporate participation has not regained its former dynamism, writes Saumitra Bhaduri l The investment rate reset THE UNION BUDGET 2026 reinforced the government’s infrastructure-led growth strategy by allocating Rs 12.2 lakh crore for capital expenditure (capex), equivalent to 3.1% of GDP. It also announced targeted measures to crowd in private investment, including an Infrastructure Risk Guarantee Fund for public–private partnerships, continued capital support to states and enhanced support for MSMEs and manufacturing. At the same time, budgeted capex growth has slowed in recent years, reflecting a shift toward fiscal consolidations. The next phase of the investment cycle is expected to rely more on private sector participation rather than continued rapid acceleration in government capex.