New Delhi, Jan. 1 -- The Centre is preparing to double down on public investment, planning to raise capital expenditure by about 7% to nearly Rs.12 trillion in FY27, according to two people aware of the matter. The move signals that public investment will continue to play a central role in supporting growth as private capex remains uneven and global uncertainty persists.

The proposal reflects the government's continued reliance on infrastructure spending to support domestic demand amid geopolitical risks, trade uncertainty and volatile financial conditions that have kept private investors cautious.

The planned increase assumes the government will close the current financial year without fiscal slippage despite sharp cuts in goods and se...