States spend just 55% of annual capex target by February: CAG data

Twenty-two states spend just over half of their FY26 capex target by February, lagging behind the Centre, while revenue spending and tax collections show steadier progress

After the first 11 months (April to February) of financial year 2025-26 (FY26), 22 states have utilised just 55.27 per cent of their combined annual budgeted capital expenditure (capex) of ₹10.22 trillion, amounting to ₹5.65 trillion, according to an analysis of monthly accounts released by the Comptroller and Auditor General (CAG) of India.

 

Of the 22 states for which data is available, nine spent less than half of their Budget Estimate (BE) on capex during April-February. These nine states included Rajasthan (44.32 per cent), Maharashtra (48.16 per cent), Uttarakhand (49.71 per cent), and Uttar Pradesh (42.45 per cent).

 

Haryana topped the chart with 94.15 per cent utilisation, followed by Himachal Pradesh at 90.99 per cent, Bihar at 84.78 per cent, and Madhya Pradesh at 74.35 per cent.

 

At the other end of the spectrum, five states recorded particularly weak progress, spending less than 40 per cent of their annual allocation. West Bengal spent 33.61 per cent of its budgeted capex during the period, while Meghalaya utilised 34.15 per cent.

 

The subdued pace of capital spending by states contrasts sharply with the Centre’s performance during the same period. Central government capex reached 84.8 per cent of its Revised Estimates (RE) in the first 11 months of FY26, according to the latest data from the Controller General of Accounts (CGA).

 

By comparison, data for 25 states in FY25 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, on the other hand, progressed more steadily. During April-February, the 22 states spent 75.5 per cent of their budgeted revenue expenditure of ₹49.3 trillion. Himachal Pradesh recorded the highest utilisation at 91.8 per cent, followed by Bihar at 89.6 per cent, Punjab at 84.7 per cent, and Andhra Pradesh at 83.75 per cent. Jharkhand (64.71 per cent), Maharashtra (63.6 per cent), and Arunachal Pradesh (60.44 per cent) were among the lowest spenders.

 

On the receipts side, states collected 81.25 per cent of their budgeted tax revenue of ₹36.5 trillion during the same period. Haryana led with collections equivalent to 89.53 per cent of its annual target, followed by Assam at 88.46 per cent, and Arunachal Pradesh at 88.42 per cent. Uttar Pradesh, Bihar, Rajasthan, and Andhra Pradesh were among the weakest performers on tax revenue.

 

Borrowings and other liabilities comfortably crossed the halfway mark, with states utilising 69.7 per cent of their budgeted borrowings, raising ₹8.25 trillion against a full-year target of ₹11.8 trillion for FY26.

 

Crisil expects the state capex, a key driver of overall government spending, coupled with higher central grants for capital expenditure in FY27, will lead to slightly edged up government capex.