The capital outlay of 25 states grew 3.7 per cent yoy during 2QFY26, leading to an improvement in the quality of states’ expenditure

xChennai: Telangana topped among states by using 27 per cent of its total expenditure on capital outlay in Q2FY26. Telangana made the fastest growth of 10.1 percentage points in capital expenditure ratio in Q2FY26 when compared to the second quarter average ratio during FY17-FY25.

The capital outlay of 25 states grew 3.7 per cent yoy during 2QFY26, leading to an improvement in the quality of states’ expenditure. The quality of expenditure is gauged by the proportion of capital outlay in total expenditure (COTE). A higher COTE ratio implies a higher proportion of funds being expended towards productive assets, which is favourable for the economy.

The COTE

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