What was the capital expenditure trend for Indian states in FY26?

In FY26, state capital expenditure saw a sharp increase of about 16% year-on-year, reaching roughly ₹4.62 lakh crore, signaling a renewed push on public investment.

Which states are driving the capital expenditure growth in India?

Large industrial states like Madhya Pradesh, Gujarat, Maharashtra, and Telangana are driving the capital expenditure upswing with substantial increases, and Andhra Pradesh has more than doubled its capex.

Are all Indian states increasing their capital expenditure?

No, the capital expenditure recovery is uneven. While some states like Madhya Pradesh and Gujarat are showing strong growth, states such as Uttar Pradesh, West Bengal, and Himachal Pradesh have recorded notable contractions.

Home / Business and Economy / States Boost Capex: Public Investment Surges 16% in FY26

States Boost Capex: Public Investment Surges 16% in FY26

28 Jan

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Summary

State capital expenditure surged 16% to ₹4.62 lakh crore in FY26.
Madhya Pradesh, Gujarat, Maharashtra, and Telangana lead the investment.
Uttar Pradesh and West Bengal show notable capital expenditure declines.

States Boost Capex: Public Investment Surges 16% in FY26

States' capital expenditure (capex) demonstrated a marked acceleration in the first three quarters of FY26, reaching roughly ₹4.62 lakh crore. This represents a robust 16% increase compared to the previous fiscal year, a significant turnaround from a modest 3% decrease observed in the April-December period of FY25. This surge indicates a renewed focus on public investment and project execution.

The recovery, however, is not uniform across all regions. Large industrial states are spearheading the upswing. Madhya Pradesh, Gujarat, Maharashtra, and Telangana have reported substantial increases, some with very high growth rates. Andhra Pradesh notably doubled its capex, potentially indicating delayed projects or a major investment cycle.

Conversely, some states are facing fiscal constraints or project timeline shifts, leading to contractions in their capex. Uttar Pradesh, despite being a large spender, recorded a notable decline. West Bengal, Himachal Pradesh, Punjab, and Chhattisgarh also saw double-digit decreases.