8 months into FY26, states have spent only 38% of the budgeted capex | Economy & Policy News – Business Standard

Clipped from: https://www.business-standard.com/economy/news/states-spent-38-3-per-cent-budgeted-capex-apr-nov-fy26-125122600908_1.html

Sixteen of 21 states spent under half of their budgeted capex in the first eight months of FY26, while the Centre’s capex stood at 55.1 per cent of BE in April-October

Borrowings and other liabilities also remained below the halfway mark. States utilised 40.85 per cent of their budgeted borrowings, raising ₹4.7 trillion against a full-year target of ₹11.6 trillion for FY26.

Listen to This Article

States have spent just 38.3 per cent of their combined annual budgeted capital expenditure (capex) of ₹9.64 trillion in the first eight months of 2025-26, according to an analysis of monthly accounts for 21 states released by the Comptroller and Auditor General (CAG) of India. 

Of the 21 states for which data is available, 16 had spent less than half of their budget estimates (BE) for capital expenditure between April and November. Telangana stood out, having utilised 99.8 per cent of its budgeted capex, followed by Haryana at 92.7 per cent, Kerala at 58.2 per cent and Assam at 52.2 per cent. 

At the other end of the spectrum, six states showed particularly weak progress. Odisha spent 28.2 per cent of its budgeted capex during the period, while Uttar Pradesh utilised 24.6 per cent. Chhattisgarh (20.6 per cent), Meghalaya (20.1 per cent), West Bengal (20 per cent) and Tripura (18.5 per cent) each spent less than 30 per cent of their annual allocation. 

The subdued pace of capital spending by states stands in contrast to the Centre’s performance. Central government capex reached 55.1 per cent of its budget estimate in the first seven months of FY26, from April to October, according to the latest data from the Controller General of Accounts. 

By comparison, data for 25 states in the previous financial year showed much stronger utilisation. In the entire FY25, states collectively spent 80.2 per cent of their budgeted capital expenditure, amounting to ₹7.8 trillion of a total allocation of ₹9.7 trillion. 

Revenue expenditure has progressed more steadily. The 21 states analysed spent nearly 53.8 per cent of their budgeted revenue expenditure of ₹47.4 trillion during April-November of FY26. Andhra Pradesh recorded the highest utilisation rate at 63.6 per cent, followed by Himachal Pradesh at 62.9 per cent and Punjab at 60.7 per cent. Jharkhand (49 per cent), Meghalaya (48 per cent) and Tripura (45.7 per cent) were among the lowest spenders in this category. 

On the receipts side, states collected 59.2 per cent of their budgeted tax revenue of ₹36 trillion in the first eight months of FY26. Assam led with collections equivalent to 65.3 per cent of its annual target, followed by Haryana at 64.1 per cent and Gujarat at 62.5 per cent. Uttar Pradesh, Kerala and Rajasthan were among the states with the weakest tax revenue performance. 

Borrowings and other liabilities also remained below the halfway mark. States utilised 40.85 per cent of their budgeted borrowings, raising ₹4.7 trillion against a full-year target of ₹11.6 trillion for FY26. 

Juxtaposing these trends against the national picture, Rajani Sinha, chief economist at CareEdge Ratings, said the Centre’s capital expenditure had remained robust, rising 32.4 per cent year-on-year during the April–October period of FY26. “Furthermore, the optimistic capex outlook, as evidenced by the strong order books of the capital goods companies, also bodes well for the investment scenario in the economy,” she added.