During the ongoing pre-Budget consultations, the government’s social welfare ministries have been asked to fasten the pace of capital expenditure, with the Finance Ministry asking departments such as Labour & Employment, Social Justice & Empowerment and Minority Affairs to sharply accelerate utilisation in the second half of FY26. These ministries have utilised only around 35-40 percent of their capital outlay in the first half, well below the pace of infrastructure-heavy departments that dominate the Centre’s capex performance.
A senior government source said the directive followed preliminary expenditure reviews. “We are still in the pre-Budget stage, where ministries are presenting their revised estimate requirements. The early numbers show that welfare ministries have been slow to spend, and they need to pick up speed in the remaining quarters,” the source told Moneycontrol.
Officials said these ministries’ low H1 utilisation, around 35–40 percent, reflects procedural challenges. The Finance Ministry’s push in H2 aims to ensure that allocated funds translate into tangible benefits for intended recipients.
These ministries’ capital projects rely heavily on state-level implementation and often involve limited brick-and-mortar activity in the first half of the year. Delays in procedural approvals, pending bills, and documentation gaps at the beneficiary level have contributed to the slow utilisation.
Focus on quality of capex
The Finance Ministry has emphasised that welfare-linked capex must not be deprioritised simply because the quantum is small. “A student should not miss a hostel admission or a disabled person lose access to support because a ministry has unspent funds. We have told the Labour, Social Justice and Minority Affairs Ministries to expedite execution. We want full utilisation, not avoidable savings,” he said.
The Centre is targeting a stronger pick-up in capital spending in the December-March period to support both budgetary credibility and the overall quality of expenditure. “The government’s approach is clear. If money has been allocated for capital or welfare purposes, it must reach the intended beneficiaries,” the source added.
Infrastructure-led ministries
The Centre’s overall capex reached Rs 5.8 lakh crore by end-September, equivalent to 51.8 percent of the Rs 11.21 lakh crore Budget Estimate for FY26. Momentum has been driven by big-ticket ministries. The Railways had utilised Rs 1,42,487 crore (56.5 percent of BE), while Defence had spent Rs 92,211.44 crore (51.23 percent) in the same period.
“Capital-intensive work naturally picks up after the monsoon, so Railways, Roads and Defence typically gain pace in Q3. Welfare ministries face additional administrative challenges, which have slowed down execution,” the government source said.
Many welfare projects depend on coordination with states or NGOs and require detailed beneficiary documentation, site clearances, and settlement of pending bills. “Legacy issues, documentation gaps and delayed payments tend to hold back their capital outlay. But we do not want savings at the cost of beneficiaries,” the source added.
Social sector capex
Unlike Railways or Defence, social welfare ministries handle a narrower and more institution-focused capital pipeline. Their outlay typically funds the construction of hostels for SC/ST/OBC students, rehabilitation and de-addiction centres, elderly care homes, training facilities, and other infrastructure linked to welfare delivery.
Upgrading or building educational and residential facilities for minority communities, including model schools and coaching centres, also forms part of the spending. A significant share of capital outlay is executed as grants to states, NGOs, and national institutes to create community assets such as care homes, disability support infrastructure, barrier-free access installations, and skill-training centres. Smaller capital purchases – like Braille presses, assistive devices, mobility aids, and lab equipment – further contribute to the fragmented nature of their asset creation.
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