Economic Survey 2026: PM GatiShakti, public capex to drive 7.2% GDP growth in FY27

The logistics sector in India is presently experiencing improvements, a development attributed to the nation's increased public capital expenditure and a deliberate strategic emphasis on infrastructure development, as documented within the recent Economic Survey 2025-26.

Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman, tabled the Economic Survey in Parliament, highlighting the infrastructure as the principal driver of economic growth. Following an anticipated 7.4% growth rate in the current fiscal year, the survey forecasts that the Indian economy will expand at a rate between 6.8% and 7.2% in the financial year 2027 (FY27).

The survey highlights that the institutionalisation of integrated planning under the PM Gati Shakti initiative has been a defining feature of this transition. This multimodal approach, complemented by the National Logistics Policy, is strengthening project execution, reducing transaction costs, and easing congestion across the supply chain.

Roads and rail drive efficiency
According to the report, the roads and highways sector is transitioning from a focus on rapid network expansion to an intensive concentration on logistics efficiency and quality. The development of high-speed corridors and multimodal integration, a key component of PM Gati Shakti, is enhancing capacity and reliability for freight movement. This infrastructure-led impetus is considered fundamental to the reduction of overall logistics costs.

The National Highway network has witnessed substantial expansion over the past decade, increasing from 91,287 km in FY14 to 1,46,572 km as of December 2025. Operational high-speed corridors have also scaled up, rising from approximately 550 km to over 5,300 km during the corresponding period, added the report.

The average annual highway construction rate more than doubled between 2014 and 2025 compared with the preceding decade.

Similarly, the railway network's focus on dedicated freight corridors, new economic rail corridors (including those for energy, mineral & cement; Port connectivity; and high traffic density routes), and modern signalling is improving throughput and multimodal integration. These investments are key to ensuring faster and more reliable freight transport across the country.

Waterways emerge as logistics backbone
In a major boost for multimodal logistics, the survey report said that the country has made substantial progress in Inland Water Transport (IWT). As of November 2025, 32 National Waterways spanning 5,155 km are operational. Cargo movement through IWT has surged, rising from 18 MMT in 2013-14 to 146 MMT in 2024-25, demonstrating the growing role of waterways in the nation's freight ecosystem. Furthermore, 11 National Waterways now support cargo, cruise, and passenger services, reflecting strong multimodal integration.

Financing reforms attracting private capital
India has established a strong global position, notably becoming the largest recipient of Private Participation in Infrastructure (PPI) investment in South Asia, securing over 90% of the region’s total private infrastructure capital, the survey stated. Domestically, this strength is evidenced by a rise in project approvals from the Public-Private Partnership Appraisal Committee (PPPAC).

This period of heightened infrastructure spending is distinguished not only by the creation of new assets but also by comprehensive reforms aimed at infrastructure financing. A range of strategic changes, including those to project finance regulations, PPP frameworks, asset monetisation, and capital market instruments are proving effective in attracting private investment, thereby ensuring the long-term viability of this logistics-focused infrastructure initiative.