Tamil Nadu among States that saw a dip in capex in Q1, FY2026

Tamil Nadu is among the States which saw a decline in capital expenditure in the first quarter of 2025-2026.

Capital expenditure (capex) goes towards creation of fixed assets, such as roads and bridges, irrigation structures, schools, hospitals, along with investments made in Public Sector Undertakings. It helps in improving economic activity and generating employment.

Tamil Nadu’s capital expenditure declined about 18% to ₹4,155.74 crore in April-June 2025 quarter, when compared to ₹5,041.90 crore in the same period last year, according to provisional figures from the Comptroller and Auditor-General (CAG).

According to a report by ICICI Bank Global Markets, Andhra Pradesh led the capex growth in the first quarter with a 267% growth, followed by Haryana 103% and Gujarat 65%. 

Uttar Pradesh saw a 42% growth, while Karnataka registered 16% growth in capex, it said. 

Apart from Tamil Nadu, Maharashtra and West Bengal also saw a 28% decline each in capex, while Telangana saw a 22% decline in capex for the first quarter, the report added.

  In first quarter of fiscal 2026, overall states’ capex grew 28% on a year on year basis. This came on a low base of a 22% decline in capex during the first quarter of fiscal 2025, it noted.

Tamil Nadu’s own tax revenue increased about 14.5% to ₹43,070.45 crore in the first quarter of 2025-2026 from ₹37,605.43 crore in the same period last year.

The State’s revenue expenditure stood at ₹79,054.68 crore in the first quarter of 2025-2026, when compared to ₹ 83,636.73 crore in the comparable period last year. Revenue expenditure includes expenditure on account of salaries, pensions and other retirement benefits, operations and maintenance, interest on outstanding loans, and subsidies and grants for welfare schemes.