States' capex more than Centre's but borrowing limits are the same

Over the past decade, there has been a significant shift in the composition of the general government (Centre and states) expenditure.

Put together, the combined expenditure of all states now exceeds that of the Centre.

In fact, capital expenditure by all states is now almost twice that of the Centre. Of the total general government capital expenditure of Rs 8.75 trillion budgeted for in 2018-19, state governments account for roughly two-thirds. 

But despite this rise in state spending, annual borrowings by states, barring exceptions allowed by the 14th Finance Commission, are placed at the same level as the Centre, even