Half of capex on railway, roads: Economic Survey

The Economic Survey highlights the 10.8 percent year-on-year growth in capital expenses made by the government. The total capital outlay is Rs 10.52 lakh crore for this ongoing fiscal, last fiscal it was Rs 9.49 lakh crore.

This year more than 50 per cent of the capital is for railways and roads at Rs 2.52 lakh crore and Rs 2.85 lakh crore, respectively. Defence takes the third spot at Rs 1.71 lakh crore.

The Centre has progressively scaled up capital expenditure from an average of 1.7 per cent of GDP in the pre-pandemic period to an average of 2.9 per cent of GDP in the years after the pandemic, the survey said.

At the same time, effective capex, a broader measure which includes capital expenditure along with grants-in-aid for the creation of capital assets, increased from an average of 2.7 per cent of GDP to 3.9 per cent of GDP over the same period.

These grants-in-aid have supported asset creation in key areas, including urban and housing affairs, the Jal Jeevan Mission and rural development. The sustained expansion of the capital component, achieved alongside declining revenue and fiscal deficits, reflects a deliberate rebalancing of expenditure towards asset-creating outlays.

Survey says emphasis on asset creation is also reflected in the composition of capital expenditure across key infrastructure sectors. Road transport and highways, along with railways, continued to account for over half of total capital expenditure through financial year 25-26.

At the same time, allocations towards transfers to states, telecommunications, and housing and urban affairs recorded robust double-digit growth, leading to a higher share for these sectors in overall capex, the survey said.