Tamil Nadu recorded an 18% decline in capital expenditure (capex) in the first quarter of the 2025-26 financial year, according to provisional data from the Comptroller and Auditor-General (CAG).
Capex, which funds the creation of fixed assets such as roads, bridges, irrigation structures, schools, hospitals, and investments in public sector undertakings, fell to ₹4,155.74 crore in April–June 2025 from ₹5,041.90 crore in the same period last year.
A report by ICICI Bank Global Markets noted that Andhra Pradesh registered the highest capex growth in Q1 FY26 at 267%, followed by Haryana (103%) and Gujarat (65%). Uttar Pradesh saw a 42% increase, while Karnataka recorded a 16% rise. Maharashtra and West Bengal posted a 28% drop each, and Telangana’s capex declined by 22%.
Overall, states’ capex grew 28% year-on-year in the quarter, following a 22% decline in the same period of FY25, the report said.
In contrast to the fall in capital spending, Tamil Nadu’s own tax revenue rose 14.5% to ₹43,070.45 crore in Q1 FY26, up from ₹37,605.43 crore a year earlier.
The state’s revenue expenditure, which covers salaries, pensions, maintenance, interest payments, subsidies, and welfare grants, stood at ₹79,054.68 crore in April–June 2025, compared with ₹83,636.73 crore in the same period last year.
(With inputs from The Hindu)
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