UP and Gujarat to Lead ₹10.2 Lakh Crore Capex Push in FY26

India’s infrastructure investment momentum is set to strengthen further in FY26, with Uttar Pradesh, Gujarat, Maharashtra, Madhya Pradesh, and Karnataka projected to contribute nearly 50% of the total ₹10.2 lakh crore state capital expenditure. As per the Bank of Baroda’s latest report, this state-driven push underlines the country’s focus on long-term asset creation, with key investments in roads, hospitals, schools, and other developmental infrastructure.

Why in News?

The Bank of Baroda has released a detailed analysis highlighting the projected rise in capital outlay by 26 Indian states in FY26. With a substantial jump from ₹8.7 lakh crore in FY25 to ₹10.2 lakh crore, the report identifies the top five states driving this growth and outlines their impact on infrastructure and economic development.

Objectives of Capex Expansion

• Enhance public infrastructure.
• Boost long-term productivity and employment.
• Strengthen state-led development amid global headwinds.
• Create quality assets (roads, health centers, irrigation, etc.).

Top 5 Capex Contributors (FY26 Projections)

1. Uttar Pradesh: 16.3% of total capex.
2. Gujarat: 9.4%
3. Maharashtra: 8.3%
4. Madhya Pradesh: 8.1%
5. Karnataka: 6.7%

Total Contribution: ~48.8%

Comparative Capex Insights (FY25)

• UP: 16.9%
• Maharashtra: 10.9%
• Gujarat: 8.1%
• MP: 7.5%
• Odisha: 6.4% (drops out in FY26)

Receipts Outlook for FY26

• Total receipts: ₹69.4 lakh crore (↑10.6% YoY)
• Revenue receipts: ↑12.3%
• Capital receipts: ↑6.6%

Top Revenue Contributors (FY26)

• Uttar Pradesh: 13.3%
• Maharashtra: 11.3%
• MP, Karnataka, Rajasthan: ~5.9% each
• Tamil Nadu’s share expected to dip slightly

Fiscal Management

• 12 states to keep fiscal deficit below historical medians
• 13 states to post revenue surplus in FY26

Economic Significance

• Rising capex indicates strong growth momentum
• Helps build critical infrastructure for future expansion
• Indicates responsible fiscal spending even amid a growth push