The union government continues its sprint on the capital expenditure front with spending worth ₹5,80,746 crore in the first half of the current financial year, up 40% from ₹4,14,966 crore in the same period of the previous financial year.  

The central government has utilized 51% of the capital expenditure allocated for the current financial year in H1, much ahead of the utilization level of 37.3% in H1, FY25.

This is the highest level of capex utilization done by the government in the first half of the fiscal in the last five years. It may be noted that H1 capital expenditure between FY22 and FY25, when government deployed it as a strategy to beat Covid blues, has been in the range of 37% to 49%.  

Government’s strategy of front loading has led to the momentum in the public infrastructure spending. “Last year, the capital expenditure was muted in the first half due to the general elections. It however picked up later and we surpassed the revised estimate. This year front loading has been done from the very beginning and we are currently on track,” said a government source.  

In FY25, the government had to revise the outlay downwards to ₹10.18 lakh crore against budget estimate of ₹11.11 lakh crore. The government, however, managed to spend ₹10.52 lakh crore in FY25. The source said with the current projects in the pipeline and execution on the ground the government may achieve the budget target of ₹11.21 lakh crore for the current financial year.

Ministry of railways, highways, and has done most of the heavy lifting while other government departments such as telecom, and housing have lagged behind.

Ministry of highways has spent ₹1.71 lakh crore in H1 out of the allocation of ₹2.72 lakh crore for the current financial year. Similarly, the ministry of railways has spent ₹1.43 lakh crore out of the total allocation of ₹2.52 lakh crore for FY26. Capital deployment towards defence services stood at ₹92000 crore against an allocation of ₹1,80,000 crore for the fiscal.

On the private capital expenditure front, the ministry of statistics has initiated a survey on private capex intentions. The previous survey, covering the period between November 2024 to January 2025, showed improvement over the years. “The average gross fixed Assets per enterprise in the private corporate sector increased from ₹3,151.9 crore in 2021–22 to ₹3,279.4 crore in 2022–23 (4% growth), and further to ₹4,183.3 crore in 2023–24, reflecting a significant 27.5% growth.