Following unprecedented challenges during and after the Covid-19 pandemic, Telangana has now emerged as the country’s leader in terms of an annual increase in capital expenditure. Telangana’s capital expenditure has more than five times increased in the last eight years, from Rs.11,583 crore in 2014-15 to Rs.61,343 crore in 2021-22.
All states and union territories budgeted a 28 percent increase in capital expenditure in 2021-22 over the previous fiscal year, with Telangana leading the way with an 87 percent increase. The state government spent approximately Rs.32,645 crore on capital expenditure in 2020-21, which increased to Rs.61,343 crore in 2021-22.
Telangana ranked fifth among major states in terms of highest capital expenditure.
The budget spent by the government on developmental activities such as equipment, buildings, health facilities, education, and other infrastructural development works is referred to as capital expenditure. Telangana has spent a large portion of its budget over the last eight years on creating fixed assets such as investment and infrastructure development, including irrigation projects that pay long-term dividends.
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The State Owned Tax Revenue (SOTR) has also increased from Rs.29,288 crore in 2014-15, following the formation of the State, to Rs.92,910 crore in 2021-22, a record increase. As a result, Telangana earns Rs.254.54 crore from SOTR while spending Rs.168 crore per day on capital expenditure alone.
West Bengal had the second highest increase in capital expenditure, rising by 78 percent from Rs.36,498 crore in 2020-21 to Rs 65,291 crore in 2021-22. Surprisingly, six states, primarily those governed by the BJP, have reduced capital spending from the previous year.
Among major states, Maharashtra budgeted only a 3% increase, while Bihar cut capital spending by a whopping 10%. Uttar Pradesh, the largest state in terms of area and population, has the highest capital expenditure of Rs.1.44 lakh crore in 2021-22, but this is only a 20% increase over Rs.94,788 crore in 2020-21.
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