TN capital expenditure fell by 8.4% in the first half of 2024-25

Tamil Nadu’s capital expenditure fell by about 8.4% to ₹16,283.84 crore in the first half of fiscal 2024-25, from ₹17,773.80 crore in the first half of fiscal 2023-24, according to provisional data from the Comptroller and Auditor General of India (CAG). . Capital expenditure refers to the expenditure on creating fixed assets like roads, bridges, irrigation structures, schools, hospitals along with investment in public sector enterprises.

For 2024-25, the state has estimated total capital expenditure of ₹ 47,681 crore, a 12.11% increase over the revised estimate of ₹ 42,532 crore in 2023-24.

Overall, capital expenditure of the top 20 states fell by 9.8% in the first half of 2024-25. Election-related restrictions/uncertainties weighed on public equity in the first half of the current financial year, according to credit rating firm CareAge Ratings.

The contraction in capital expenditure was particularly sharp in Andhra Pradesh (-72% YoY), Telangana (-56%), Haryana (-38%), Uttarakhand (-35%), and Uttar Pradesh (-16%). However, some states like Punjab, Karnataka, Maharashtra and Rajasthan reported double-digit growth in capital expenditure in the first half of 2024-2025.

Citing CAG numbers for 22 states, the Reserve Bank of India’s report titled “State Finances: A Study of Budgets 2024-25” said that the state’s capital expenditure declined in April-October 2024-25, likely Reflects the effect of the model code. Conduct enforced during general elections. Capital expenditure, however, showed signs of recovery in October 2024, it said.

In fiscal 2024-25 (till November), Tamil Nadu’s capital expenditure was ₹ 22,541.54 crore, which, according to the CAG, is 47.26% of the budget estimate. It’s important for states to closely monitor actual capital costs, as they have historically struggled to fully utilize their budgeted capex allocations, CareAge said.