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Ministry of Road Transport and Highways (MoRTH) and manage FCI’s cash flow and must be repaid before the
Ministry of Railways (MoR) remain the two largest capex end of the financial year. Hence, it does not essentially
spenders, together accounting for Rs 2.29 lakh crore, or 53 represent asset-creating capital expenditure.
per cent of total capex spending during April–August 2025.
This is in line with their combined share of 47 per cent in the The next two largest spenders are Department of
Budget Estimates for capital expenditure for FY26. Telecommunications (DoT) and Ministry of Housing and
Urban Affairs (MoHUA). Together, they have spent Rs
31,678 crore, or roughly 35.4 per cent of their combined
Infrastructure Ministries (Road and annual budget allocation for the year. While DoT (35 per
Rail) have driven high growth in capex cent of capex spending out of its annual budget allocation
in the fiscal year so far vs 6 per cent last year) has shown strong acceleration,
capex spending by MoHUA has lagged (37 per cent of
capex spending out of its annual budget allocation as
compared to 44 per cent last year).
Both Ministries have outperformed last year’s pace.
MoRTH has utilised 63 per cent of its annual budget
allocation so far, up from 52 per cent last year, while MoR
has reached 57 per cent, compared to 54 per cent in the Adjusting for the Outlier
same period last year.
As noted earlier, the Rs 50,002 crore reported under
The third-largest component of capex is the ‘Capital Outlay Department of Food and Public Distribution represents
on Defence Services’ at Rs 92,211 crore. The ministry has temporary financing, not genuine capital creation. After
utilized 51 per cent of its annual allocation in H1FY26 excluding this amount, the Centre’s capex in Apr-Sep 2025
compared to 31 per cent in the same period last year, stands at Rs 5.3 lakh crore compared to Rs 4.1 lakh crore
reflecting the strong emphasis on national security by the in the same period last year, reflecting a 30.8 per cen
government. annual growth.

‘Transfers to States for Capital Expenditure’ under the At this current pace, government appears well-positioned to
Ministry of Finance, the next largest item, reached Rs meet, or likely exceed, its annual target of Rs 11.2 lakh crore,
57,093 crore (about 33 per cent of its annual allocation of in contrast to FY25 when total spending reached Rs 10.5 lakh
Rs 1.7 lakh crore). This marks a sharp increase from the crore against the budget allocation of Rs 11.1 lakh crore.
last year, when the amount transferred in the same period
was just 23 per cent of the annual allocation.
Conclusion
Another significant item is a Rs 50,002 crore capex
expenditure reported by the Department of Food and The latest data underscores a strong revival in public
Public Distribution (DFPD). Although the Union Budget investment during the first half of FY26, driven by higher
2025-26 has provided a capital allocation of only Rs 20 capex spend seen across the key infrastructure ministries of
crore for the Department, the monthly amount published Road Transport & Highways and Railways. Even after
by the CGA has recorded a much larger amount. A report adjusting for non-asset-creating outlays such as the WMA to
from the Food Corporation of India, (FCI) which comes FCI, the underlying pace of capex remains robust, indicating
under the purview of DFPD, mentions that the amount has that public investment continues to play a pivotal role in
been extended to the FCI under the Ways and Means sustaining India’s growth momentum. The faster pace of
Advance (WMA) by the Government of India. Amount spending suggests that the government remains firmly on
1
disbursed under WMA is essentially a short-term loan to course to meet, or possibly exceed, its annual target.

1 https://dfpd.gov.in/WriteReadData/Other/6899cd2e-3154-4e1e-b998-4659e9ceb886.pdf

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