New Delhi, Sept. 23 -- The Centre has the fiscal space to lift infrastructure spending beyond the budgeted Rs.11.21 trillion for this financial year if private sector spending remains subdued amid global headwinds, two officials said.

The government has room to increase its 2025-26 capital expenditure by Rs.20,000-30,000 crore, contrasting with FY25's cutbacks and taking it closer to Rs.11.5 trillion, they added.

Even if its spending runs slightly above target, the government will stick to its fiscal deficit goal of 4.4% of GDP for FY26, supported by buoyant tax collections and a record dividend transfer from the Reserve Bank of India, the officials said, declining to be identified.

Despite repeated calls from the government, private s...