According to a Bank of Baroda study, India’s state capital expenditure (capex) is projected to grow by 17% to Rs. 10.2 lakh crore in FY26, up from Rs. 8.7 lakh crore in FY25.

Uttar Pradesh and Gujarat are expected to be the top contributors to this infrastructure push, alongside Maharashtra, Madhya Pradesh, and Karnataka.

Key Highlights:

• State capex is projected to rise from Rs.8.7 lakh crore in FY25 to Rs. 10.2 lakh crore in FY26, marking a 17% year-on-year increase.
• Uttar Pradesh is expected to contribute 16.3% of the total capex, followed by Gujarat at 9.4%, making them the top two investing states.
• The top five states—UP, Gujarat, Maharashtra, Madhya Pradesh, and Karnataka—will account for nearly 50% of total state capital spending.
• In FY26, Karnataka replaces Odisha in the top five state capex contributors compared to FY25.
• State revenue receipts are estimated at Rs.69.4 lakh crore in FY26, with a 12.3% growth in revenue income and a 6.6% rise in capital receipts.