Central Government Reports Over Five-Fold Rise in Effective Capital Expenditure

The Central Government’s effective capital expenditure increased to ₹90.87 lakh crore during the period from 2014–15 to 2025–26, compared with ₹17.04 lakh crore recorded between 2004–05 and 2013–14, according to information presented in the Lok Sabha. The expenditure reported for FY 2025–26 is provisional.

During 2014–26, the Centre’s direct capital expenditure stood at ₹64.70 lakh crore, substantially higher than the ₹12.39 lakh crore incurred during 2004–14. In addition, ₹26.17 lakh crore was provided as grants-in-aid to state governments for creating capital assets.

Effective capital expenditure covers the Union Government’s own capital spending as well as grants allocated to states for developing durable public assets. These grants support projects such as school buildings under Samagra Shiksha, housing under the Pradhan Mantri Awas Yojana and other infrastructure-related programmes.

The data also showed an increase in the Centre’s capital expenditure relative to the size of the economy. Capital expenditure rose from 1.6% of GDP in FY 2014–15 to 3.2% in both FY 2023–24 and FY 2024–25. It subsequently stood at a provisional 3.1% of GDP in FY 2025–26.

According to the government, increased public capital spending has contributed to infrastructure development across roads, railways, urban facilities, energy systems and digital connectivity. The expenditure is also expected to improve logistics efficiency, support employment generation and encourage additional investment from the private sector.

The government stated that effective capital expenditure would continue to receive priority through annual Budget allocations and financial assistance to states. This includes support under the Scheme for Special Assistance to States for Capital Investment.

Infrastructure planning and project implementation will also be supported through initiatives such as the PM GatiShakti National Master Plan, National Logistics Policy and PM GatiShakti Public Platform. These measures are intended to improve coordination, integrated planning and the timely delivery of infrastructure projects. CA Sansaar