Despite a slow start, States’ capex may rise this year.

• India’s top 18 states, which account for 94% of state government capital expenditure, may see a 7% to 9% increase in capex outlays in 2024-25.
• Crisil Ratings predicts the capex outlays of these states to reach ₹7.2 lakh crore, compared to ₹6.7 lakh crore in 2023-24.
• ICRA predicts a 13% rise in combined capital spending of 13 major states to ₹6.5 lakh crore this year.
• Crisil’s senior director, Anuj Sethi, predicts a 7-9% growth in capital outlays, resulting in States achieving about 90% of their budgeted target this fiscal.
• The growth is supported by a 26% surge in States’ borrowings in the second quarter.
• The 18 states’ capital outlay as a share of their gross state domestic product (GSDP) is projected at 2.4% this year.