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Key Points

Uttar Pradesh and Gujarat are set to dominate India's infrastructure spending, accounting for nearly half of all state capex in FY26. Maharashtra, Madhya Pradesh, and Karnataka round out the top five contributors, while smaller states like Nagaland lag behind. The total capital outlay is projected to rise 17% to Rs 10.2 lakh crore, signaling aggressive infrastructure push. Bank of Baroda's report highlights widening regional disparities in development spending across states.

Key Points: UP and Gujarat to lead India's capex surge with 50% FY26 contribution

  • UP tops with 16.3% capex share in FY26
  • Gujarat jumps to 9.4% from 8.1% in FY25
  • Nagaland and Sikkim trail at 0.4%
  • States likely to meet fiscal deficit targets
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Top 5 states to contribute half of capex in FY26, UP & Gujarat biggest contributor: Report

Uttar Pradesh and Gujarat will drive half of India's Rs 10.2L crore FY26 capex, with Maharashtra, MP, and Karnataka following, per Bank of Baroda report.

"Over 5 states to contribute 50% of FY26 capital outlay, UP and Gujarat leading - Bank of Baroda report"

New Delhi, June 23

Over five states in the country are expected to contribute nearly half of the total capital outlay (capex) in the financial year 2025-26 (FY26), according to a report by Bank of Baroda.

Uttar Pradesh and Gujarat are among the biggest contributors, followed by Maharashtra, Madhya Pradesh, and Karnataka.

The report stated, "Over 5 states are estimated to contribute around 50 per cent of the total capital outlay in FY26, with Uttar Pradesh and Gujarat amongst the biggest contributors, followed by states like Maharashtra and Madhya Pradesh".

Capital outlay refers to the money spent by governments (in this case, state governments) on building or acquiring fixed assets like roads and highways, schools and hospitals.

In FY25, the total capital outlay of 26 states was Rs 8.7 lakh crore. The report mentioned that this number is expected to increase to Rs 10.2 lakh crore for FY26.

Among the 26 states, Uttar Pradesh leads with a 16.3 per cent share in capital outlay, followed by Gujarat (9.4 per cent), Maharashtra (8.3 per cent), Madhya Pradesh (8.1 per cent), and Karnataka (6.7 per cent).

In comparison, in FY25, the top five contributors were Uttar Pradesh (16.9 per cent), Maharashtra (10.9 per cent), Gujarat (8.1 per cent), Madhya Pradesh (7.5 per cent), and Odisha (6.4 per cent).

States like Nagaland, Himachal Pradesh, and Sikkim are estimated to have the lowest share in FY26 capital outlay, contributing just 0.4 per cent.

The report also mentioned that the total receipts of all 26 states are expected to rise to Rs 69.4 lakh crore in FY26, marking a 10.6 per cent increase from Rs 62.7 lakh crore in FY25. Revenue receipts are likely to grow by 12.3 per cent, while capital receipts may increase by 6.6 per cent in FY26.

On the revenue side, the top five states contributing the most in FY26 include Uttar Pradesh (13.3 per cent), Maharashtra (11.3 per cent), and Madhya Pradesh, Karnataka, and Rajasthan (5.9 per cent each). Tamil Nadu was also among the leading states in revenue receipts in FY25.

The report also noted that states are expected to stick to their fiscal deficit targets in FY26. Around 12 states are projected to have a lower fiscal deficit (as a percentage of GSDP) than their median levels. Additionally, 13 states are estimated to be in revenue surplus during the year.

- ANI

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Reader Comments

Here are 6 diverse user comments reflecting Indian perspectives on the article:
R
Rajesh K.
Good to see UP and Gujarat leading in capex! But why are northeastern states getting just 0.4%? Development should be more balanced across India. We need better infrastructure in smaller states too for true national progress. 🇮🇳
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Priya M.
As someone from Karnataka, I'm happy we're in top 5 but concerned about the drop in Maharashtra's contribution. Mumbai is our financial capital - hope this doesn't affect job creation. The 10.6% growth in total receipts is encouraging though! 👍
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Amit S.
UP maintaining top position shows how much potential our most populous state has! But hope this investment translates to better roads and schools on ground level, not just on paper. Corruption in implementation is still a big challenge.
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Sunita R.
Interesting to see Madhya Pradesh climbing up the ranks! As a small business owner in Bhopal, I've noticed improved infrastructure in recent years. Hope this trend continues with more industrial parks and better connectivity to boost local economy.
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Vikram J.
While big states dominate capex, we must not ignore Himalayan states like Himachal getting just 0.4%. Climate change makes their infrastructure vulnerable. They need special attention for sustainable development. #BalanceGrowth
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Neha P.
Gujarat's consistent performance is impressive! But I wonder - with 13 states in revenue surplus, why can't more funds be allocated to health and education? After pandemic, we need stronger social infrastructure across all states.

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