Centre's effective capital expenditure rises over five-fold to Rs 90.87 lakh crore during 2014-26: Govt
New Delhi, July 20
The Centre's effective capital expenditure rose to Rs 90.87 lakh crore during 2014-26, more than five times the Rs 17.04 lakh crore recorded during 2004-14, while the government's direct capital expenditure increased to Rs 64.70 lakh crore from Rs 12.39 lakh crore over the same periods, the Finance Ministry informed Parliament on Monday.
In a statement tabled in response to a starred question in the Lok Sabha, Finance Minister Nirmala Sitharaman said the Centre's capital expenditure during 2004-14 stood at Rs 12.39 lakh crore, compared with Rs 64.70 lakh crore during 2014-26, adding that the figure for FY2025-26 is provisional.
The government explained that "effective capital expenditure refers to expenditure of Central Government for asset creation and includes grants-in-aid provided to the State Governments for creation of assets such as school buildings under Samagra Shiksha, houses under PM Awas Yojana, etc." In simple terms, effective capital expenditure includes not only the Centre's own spending on creating assets but also the money it gives states specifically for building public infrastructure and other capital assets.
According to the statement, effective capital expenditure increased to Rs 90.87 lakh crore during 2014-26 from Rs 17.04 lakh crore during 2004-14. Of this, Rs 26.17 lakh crore comprised grants provided to states for creating capital assets, while the remaining Rs 64.70 lakh crore was the Centre's own capital expenditure.
The government also highlighted that capital expenditure as a share of GDP has increased over the years, rising from 1.6 per cent in FY2014-15 to 3.2 per cent in FY2023-24 and FY2024-25, before moderating marginally to 3.1 per cent in FY2025-26 (provisional).
Explaining the impact of higher capital spending, the statement said, "The increase in capital expenditure as a percentage of GDP has led to an increase in infrastructure development including roads, railways, urban infrastructure, energy and digital connectivity." It added that higher public investment has "led to improved logistics efficiency, generated employment and crowded-in private investment." In simple terms, the government said increased spending on infrastructure has helped improve connectivity, create jobs and encourage private companies to invest alongside public projects.
Looking ahead, the government said it will continue to prioritise effective capital expenditure through budgetary allocations, support to states under the Scheme for Special Assistance to States for Capital Investment (SASCI), and initiatives such as the PM GatiShakti National Master Plan, the National Logistics Policy and the PM GatiShakti Public Platform to improve planning and infrastructure delivery.
— ANI
Reader Comments
Impressive numbers, but I'm a bit skeptical. The government says effective capex includes grants to states for asset creation—how much of that actually gets utilised efficiently? We've seen delays in projects under schemes like PM Awas Yojana and Samagra Shiksha. The intent is good, but implementation is key. Still, 90.87 lakh crore is no joke—hopefully it creates lasting infrastructure.
As someone working in urban planning in Bengaluru, this is encouraging news. The mention of PM GatiShakti and the National Logistics Policy is spot-on—we desperately need better multimodal connectivity. But I'd love to see more transparency on how states are using the Rs 26.17 lakh crore in grants. Are we tracking outcomes properly? Infrastructure without maintenance is just a waste.
Honestly, I'm glad to see the government prioritising infrastructure over just subsidies. The 5-fold increase in effective capex is massive—from 17 lakh crore to 90 lakh crore! If even half of this is used well, we could see new highways, better railway stations, and improved digital access. But please, let's focus on rural areas too, not just cities. Gramin development needs equal attention. 👷♀️
Excellent data! The government is clearly on the right track—more capital spending means more jobs and better infrastructure. I've seen the difference in my hometown with new road projects under the scheme. But I do wish they'd publish a breakdown of state-wise grants so we can hold local governments accountable. Transparency will ensure this money doesn't just sit idle in bank accounts.
M We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.