States have budgeted 36 percent higher capital expenditure (CAPEX) during this financial year, which may lead to a sharp rise in their fiscal deficit to Rs 8.4 lakh crore, a report by ICRA said on Friday.
Registering an increase of 34.1 percent from the prepandemic (FY20) levels, 26 large states, excluding Assam, have spent Rs 5 lakh crore in capital expenditure, or over Rs 1.3 lakh crore they had spent in Financial year 2020, shows an ICRA analysis of these states' budgets.
According to the ICRA, these 26 states are on course to spend Rs 6.8 lakh crore or 35.8 percent more this fiscal in capital expenditure over FY22 when it stood at Rs 5 lakh crore. As much as 72 percent of the incremental Rs 1.8 lakh crore capital push is led by UP, Maharashtra, Bengal, Odisha, Andhra and Haryana. In the previous fiscal, the capital expenditure push was led by Bihar, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Telangana, Tamil Nadu and Uttar Pradesh.
The combined capital expenditure of these 26 states is budgeted to expand by an impressive 35.8 percent to Rs 6.8 lakh crore inFY23, on top of the 34.1 percent or Rs 5 lakh crore they spent in FY22. In FY20, they spent Rs 3.7 lakh crore in capital expenditure, while FY21 was a washout due to the pandemic, the ICRA said.
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