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Nitin Gadkari And Ashwini Vaishnavi

Whenever the country's GDP and economic growth comes up, there is definitely mention of government expenditure in the country. It is said in all the reports that the country's growth is increasing due to increase in government expenditure. Now the biggest question is that which ministry is seen at the forefront in this government expenditure. According to the latest data of the Controller of General Accounts (CGA), the Road Transport, Highways and Railways ministries appear to be at the forefront in terms of government spending. Both the ministries have crossed the national average capital expenditure or Capex by spending 63 per cent and 57 per cent of the budget estimates respectively in the first half of the financial year 2025-26. According to CGA, Dekhpe has got 52 percent of the total Capex Budget Estimates (BE) for April-September of the financial year 2025-26.

How much contribution of which ministry in Capex?

The increase in capex includes Rs 500 billion distributed to the Department of Food and Public Distribution against the budget allocation of Rs 20 crore for FY2026. Without this extraordinary amount, total government capex growth in the first half of the financial year would have been 47.3 per cent of the BE estimate for FY2026.

An analysis of ministries with a minimum allocation of Rs 3,000 crore under Capex has shown that the laggards in spending include the Ministry of Petroleum and Natural Gas and the Department of Economic Affairs, both of which utilized only 2 per cent of their allocation in H1FY26. According to CGA data, the Department of Science and Technology did not utilize anything of its Rs 20,096 crore capex allocation.

Which ministry achieved how much target?

How does FY2026 capex compare to last year's performance?

Total capex for the April-September period of FY 2026 increased by 40 per cent to Rs 5.8 trillion compared to the same period last year, which is much higher than the 6.6 per cent growth rate set in the budget. Madan Sabnavis, Chief Economist of Bank of Baroda, said that the government is emphasizing on Capex, but now it will exercise caution as there will be pressure on revenue due to shortfall in GST collection. However, now with the improvement in consumer sentiment, we will see further increase in private sector investment. He said that although the overall capex target will be achieved, there is no scope to go beyond that.

What is the fiscal impact of higher capex?

Experts said that along with the increase in capex, there has also been a huge decline in revenue expenditure. An analysis by Motilal Oswal said revenue expenditure in April-September of FY26 stood at Rs 17.2 trillion, 44 per cent of the FY26 budget estimate – the lowest in at least a decade.

Motilal Oswal's report said that we believe that despite the increase in defense expenditure, the fiscal deficit remains manageable. We see a downside risk of 10 basis points due to decline in revenue receipts. But the positive thing in fiscal math is that revenue expenditure is yet to pick up pace.

Will the government be able to stick to the fiscal deficit target?

A report by Nomura says that to prevent the decline in the fiscal deficit target, capex will have to be reduced by about 15 percent in the second half of the financial year. However, economists believe the government will manage to stay within its target as capex is a discretionary expenditure and can be adjusted, which will help in maintaining the fiscal deficit target of 4.4 per cent. Finance Minister Nirmala Sitharaman on Tuesday reiterated that the government is confident of achieving the fiscal deficit target of 4.4 per cent in fiscal year 2025-26 before shifting its focus to reducing the debt-GDP ratio from the next financial year.