Capital expenditure by states set to cross Rs 5 trillion in 2018-19

Over the period, states have ramped up spending on the social sector, which has risen from 6.7 per cent of GDP in 2014-15 to 8 per cent in 2018-19

Capital outlay by all states is expected to touch a staggering Rs 5.37 trillion in 2018-19 (BE), up from Rs 4.7 trillion in 2017-18 (RE), shows the latest Reserve Bank of India (RBI) study on state finances. The spending amounts to 2.9 per cent of Gross Domestic product (GDP).

By comparison, the Centre’s capital expenditure is budgeted at Rs 3 trillion in 2018-19 or 1.6 per cent of GDP. A closer look reveals the changing priorities of states. Capital spending by them on transport has surged to Rs 1.11 trillion in 2018-19, from Rs 663 billion in 2014-15 — a rise