Uttar Pradesh is on track to emerge as one of India’s most aggressive spenders on capital projects this fiscal, significantly outpacing most large states in both ambition and scale. With an additional Rs 6,128 crore allocated through supplementary demands, the state’s total planned capital outlay has risen to about Rs 1.71 lakh crore, well above the Rs 1.65 lakh crore initially budgeted.
On December 22, the state government announced supplementary demands for grants worth Rs 24,496 crore, with roughly a quarter earmarked for capital expenditure, underscoring a clear push to accelerate infrastructure creation.
The capex expansion comes alongside a stronger growth outlook. Uttar Pradesh has revised its Gross State Domestic Product (GSDP) growth estimate to 13 percent, up from 12 percent projected earlier. The upward revision places the state among the top five fastest-growing large states, behind only Bihar, Rajasthan, Tamil Nadu and Andhra Pradesh.
Among the highest capex intensities
This combination of robust growth and heavy infrastructure spending puts Uttar Pradesh near the top on key fiscal metrics. At 5.5 percent of GSDP, the state’s capex intensity is among the highest in the country, exceeded only by a handful of states such as Odisha and Madhya Pradesh.
The contrast with other major economies is stark. Maharashtra’s capital spending works out to just 1.7 percent of GSDP, while Tamil Nadu allocates 1.6 percent and Karnataka about 2.2 percent. Even relatively high-growth states such as Gujarat and Telangana devote a smaller share of output to capital formation than Uttar Pradesh.
Scale stands out among peers
In absolute terms as well, Uttar Pradesh’s infrastructure push dwarfs that of most peers. Rajasthan and Bihar, which have budgeted meaningful capital programmes, are expected to spend Rs 53,686 crore and Rs 40,532 crore respectively, equivalent to 2.7 percent and 3.7 percent of GSDP. Andhra Pradesh and Haryana are even more conservative relative to the size of their economies.
Only a few large states come close. Odisha’s capex stands at around 6.1 percent of GSDP, while Madhya Pradesh is at 4.9 percent, making them the closest comparators to Uttar Pradesh’s current infrastructure appetite.
The supplementary allocation signals intent to fast-track projects across highways, logistics infrastructure, public works, urban development and industrial corridors. For many other states, the picture is far less ambitious. Kerala, Punjab and Haryana are spending close to or below 1.2 percent of GSDP on capital investment.
If execution holds and fiscal space remains manageable, Uttar Pradesh’s outsized capex push could help it consolidate its position as one of India’s most investment-led regional economies this year, standing out at a time when many large states remain cautious on capital spending.
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