R Shankar Raman Sees Capex Driving India's Growth Roadmap by 10%

Larsen & Toubro CFO R Shankar Raman expects the Union Budget for FY27 to raise capital expenditure by around 10 percent, signaling continued government focus on infrastructure despite concerns over weak private investment.

Speaking to PTI, Raman said ample liquidity in the system would prevent any crowding out of private capital due to high public spending.

Referring to the more than ₹11 lakh crore allocation for capital expenditure in the FY26 Budget, Raman said the upcoming Budget, to be presented by Finance Minister Nirmala Sitharaman, is likely to stay on the same path. “They will possibly go for a 10 per cent increase...that is what I am anticipating, but that's at a personal level,” he said.

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Raman stressed that infrastructure will remain central to India’s long-term growth goals. “If India is to become a developed economy by 2047, infrastructure has a lot of role to play, and I think the government is seized of this. I am hopeful that they will allocate adequate resources in the budget to be able to do that,” he said.

From an industry lens, Raman noted a visible shift in how large infrastructure projects are being planned, adding that “infrastructure has miles to go.” However, he flagged execution risks when contracts are awarded solely on the basis of the lowest bid, often leading to delays. He welcomed the government’s push for a “qualitative-based pricing mechanism,” which factors in technical capability and timely delivery.

On workforce challenges, the Larsen & Toubro CFO said manpower shortages continue, driven by changing worker preferences after the pandemic and alternative employment options. Taking projects closer to workers’ home regions, he said, could help ease the strain.