Chandigarh, Dec 2: Punjab has reported a 36% decline in capital expenditure during the first half of the 2025-26 fiscal year, raising concerns over the state’s investment in development projects. According to official data from the audit and accounts department, the state government spent ₹1,760 crore on capital projects between April and September, which is only 17% of the ₹10,302 crore allocated in the budget for the current fiscal year.
By comparison, Punjab had spent ₹2,773 crore, or 37% of the budgeted amount, during the same period last year. Capital expenditure refers to government investment in long-term assets that generate revenue and stimulate economic growth.
Economists said sluggish capex utilisation reflects poor asset creation, insufficient development funding, and potential neglect of existing infrastructure, which could negatively affect the state’s financial health.
A senior government official said the low utilisation was partly due to delays in bill submissions by various departments. “We are holding regular meetings to review the progress of development works and accelerate capital spending. The departments have been asked to promptly book their capex expenditure. There has been an improvement in capex utilisation, which has now increased to 24% by the end of October,” the official noted.
Among major states, Punjab remains one of the lowest spenders in asset creation, with only Chhattisgarh (14%), West Bengal (15%) and Uttar Pradesh (16%) recording lower utilisation. In contrast, states like Telangana, Kerala, Madhya Pradesh, and Gujarat reported higher capital expenditure, with Telangana topping the list at 61% utilisation.
Punjab’s struggle to meet capex targets is not new. In 2024-25, the state spent ₹6,874 crore against a budget of ₹7,445 crore. The previous year, only ₹4,743 crore was spent against a target of ₹10,345 crore. A 2023 Bank of Baroda report had also labelled Punjab a ‘laggard’ in capital spending, citing unsustainable subsidies and lopsided priorities despite rising revenues and substantial borrowings.
