States spend just 52% of FY26 capex budget in April-January period

States spent only 51.8 per cent of their combined FY26 capital expenditure budget during April-January, trailing the Centre's capex pace, according to CAG data

After the first 10 months of 2025-26 (April-January), states have managed to spend just over half (51.84 per cent) of their combined annual budgeted capital expenditure (capex) of ₹10.37 trillion amounting to ₹5.38 trillion, according to an analysis of monthly accounts for 23 states released by the Comptroller and Auditor General (CAG) of India.

 

Of the 23 states for which data is available, 12 spent less than half of their Budget Estimate (BE) on capex during April-January, including Karnataka, Maharashtra, Punjab and Uttar Pradesh, among others. 

Telangana stood out as an outlier, emerging as the only state to exceed its budgeted capex, with utilisation at 121. 56 per cent. Haryana followed at 92.75 per cent, Kerala at 82.09 per cent and Bihar at 80.19 per cent. 

At the other end of the spectrum, seven states recorded particularly weak progress. West Bengal spent 29.06 per cent of its budgeted capex during the period, while Tripura utilised 29.46 per cent. States like Chhattisgarh (31.01 per cent), Meghalaya (34 per cent), Uttar Pradesh (36.53 per cent), and Rajasthan (38.47 per cent) spent less than 40 per cent of their annual allocation.

 

The subdued pace of capital spending by states contrasts sharply with the Centre’s performance during the same period. Central government capex reached 76.9 per cent of its Revised Estimates (RE) in the first 10 months of FY26, from April to January, according to the latest data from the Controller General of Accounts (CGA).

 

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

 

Revenue expenditure progressed more steadily. During April-January, the 23 states spent 68.22 per cent of their budgeted revenue expenditure of ₹51 trillion. Bihar recorded the highest utilisation at 82.9 per cent, followed by Himachal Pradesh at 81.8 per cent, Tamil Nadu at 77.1 per cent and Andhra Pradesh at 76.95 per cent. Jharkhand (56.74 per cent), Maharashtra (57.25 per cent) and Tripura (57.69 per cent) were among the lowest spenders.

 

On the receipts side, states collected 73 per cent of their budgeted tax revenue of ₹38.1 trillion during the same period. Haryana led with collections equivalent to 80.8 per cent of its annual target, followed by Assam at 80.1 per cent and Gujarat at 79 per cent. Uttar Pradesh, Bihar, Rajasthan and Nagaland were among the weakest performers on tax revenue.

 

Borrowings and other liabilities comfortably crossed the halfway mark, with states utilising 61.2 per cent of their budgeted borrowings, raising ₹8 trillion against a full-year target of ₹13.1 trillion for FY26.

 

Anuradha Basumatari, director at India Ratings & Research, expects states to achieve an aggregate capex-to-GDP ratio of 2.7 per cent this financial year, rising to 2.9 per cent in FY27.