Hyderabad: Telangana has emerged as the top-performing state in terms of capital expenditure (capex) utilisation during 2025-26, recording the highest spending efficiency at 147.58 per cent. The latest monthly accounts analysis released by the Comptroller and Auditor General of India (CAG) highlighted that the national average capex utilisation declined to 77.23 per cent in FY26 from 80.23 per cent in FY25. Telangana outperformed all other states and registered the sharpest improvement in capital spending, which is double the national average.
Capital expenditure refers to government spending on the creation of durable assets such as roads, bridges, flyovers, schools, hospitals, airports and railway lines, besides expenditure aimed at reducing liabilities such as repayment of debt. Such expenditure is considered crucial for long-term economic growth.
In contrast, revenue expenditure relates to recurring day-to-day operational expenses incurred for running government departments and public services, which neither create long-term assets nor reduce liabilities.
The government repaid debt of Rs.33,574 crore incurred on the Kaleshwaram lift irrigation scheme (KLIS), which contributed to the capex spending.
The CAG analysis showed that 20 states together utilised ₹7.92 lakh crore, 77.23 per cent of their combined budgeted capital expenditure of ₹10.26 lakh crore. This represented a decline from FY25, when 26 states collectively spent 80.23 per cent of their budgeted capex, indicating a slowdown in the pace of state-level capital spending.
Telangana not only topped the country in FY26 but also recorded the largest year-on-year improvement in capex utilisation. The state increased its utilisation from 108.13 per cent in FY25 to 147.58 in FY26, a jump of nearly 39 percentage points. Telangana’s budget estimate for capital expenditure stood at ₹36,504.45 crore, while the actual expenditure till March far exceeded the figure at ₹53,873.31 crore.
Karnataka stood second with 102.46 per cent, followed by Himachal Pradesh, Haryana, Bihar, Madhya Pradesh, Punjab and Gujarat where it was 82.28 per cent.
At the bottom end, West Bengal spent only 48.06 per cent of its budgeted capex, Rajasthan (51.82), Chhattisgarh (57.12), Tripura (63.34).
The report also noted major shifts in capex performance compared to the previous financial year. Haryana posted a sharp rise in utilisation from 57.86 per cent in FY25 to 96.56 per cent in FY26, while Himachal Pradesh improved from 71.58 per cent to 96.73 per cent. Andhra Pradesh too registered improvement, moving from 42.26 per cent to 66.11 per cent.
The CAG report further observed that state governments witnessed the customary year-end surge in spending. After the first 11 months of FY26, 22 states had utilised only a little over 55 per cent of their annual capex allocations, indicating that a substantial portion of capital expenditure was incurred during the final month of the financial year.
On the revenue expenditure front, the 20 states spent 87.77 per cent of their combined budgeted revenue expenditure of ₹50.16 lakh crore during FY26, lower than the 90.72 per cent recorded by 26 states in FY25. Bihar topped at 101.63 per cent, exceeding its budget estimate, followed by Chhattisgarh (96.85), Gujarat (96.35), Punjab (95.47) and Himachal Pradesh (95.42 per cent). Tripura recorded the lowest revenue expenditure utilisation at 73.59 per cent, followed by Uttar Pradesh (80.94) , Maharashtra (80.95) and Assam (83.65).
In terms of tax revenue collections, states together collected 91.64 per cent of their budgeted tax revenue target of ₹36.94 lakh crore during FY26, lower than the 95.27 per cent recorded in FY25. Haryana led the country with collections equivalent to 99.23 per cent of its annual target, followed by Maharashtra at 98.28. Telangana lagged in tax revenue collections by achieving 86.93 per cent of budgeted tax revenue target of Rs.1,75,319 crore, amounting to `1,52,400 crore. However, it is better than 82.90 per cent in FY 24.
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