Capital expenditure by state governments likely grew 10% on-year in the first six months of the current financial year on a shrunken base, reflecting a moderate rate of growth compared to the Centre’s frontloading of capex to boost economic activity.

A review of 18 states’ finances by FE showed that their capex in April-September rose to Rs 2.5 lakh crore compared with Rs 2.26 lakh crore in the year-ago period. These states’ capex had contracted by 9% in April-September a year ago, due to election-related pauses.

The Centre’s capex rose 40% on year in H1FY26 compared with a 15% on year contraction in H1FY25 due to election-related pauses.

Borrowing and other liabilities of the 18 states — Uttar Pradesh, Maharashtra, West Bengal, Madhya Pradesh, Odisha, Andhra Pradesh, Tamil Nadu, Guj

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