New Delhi, Sept. 24 -- India has justifiably increased its focus on infrastructure development. Both the Union and states have prioritized capital expenditure to foster faster long-term economic growth. Budgeted capital expenditure (capex) of the Centre rose to over 3% of GDP in 2025-26 from 1.7% a decade ago. Over the same period, the share of capex in the central government's expenditure has also doubled, reflecting a clear policy shift.

India's capex, however, remains modest compared to other emerging and large economies, even as interest payments on public debt have risen; they now consistently exceed 5% of GDP, indicative of increased pressure on servicing liabilities.

State governments contribute more to India's total spending tha...