Most major states fell behind their budgeted investment targets in FY23, which was set at Rs 7.4 lakh crore but could only spend Rs 5.71 lakh crore or 76, Only 2%, according to an analysis. Only four states – Karnataka, Sikkim, Arunachal and Bihar – exceeded their targets, while Jharkhand and Madhya Pradesh’s capital expenditure was 98% each. Eleven states fared better with 80% target achievement, according to analysis by economists at the Bank of Baroda.

In contrast, in FY21, the level of underperformance was high at 72%, primarily due to pandemic emergency spending, and improved to 95% in FY2019. 22.

Surprisingly, none of the 25 states with available data were able to meet even the three-quarters goal, with the peak success rate being just 72.4%, according to the analysis.

This is surprising since the Center had disbursed the amounts required for the year.

The bad show was led by Andhra, who could only spend 23.1% or Rs 6,917 crore of the budgeted Rs 29,917 crore for the last financial year; followed by Haryana, which spent only 48.1% or Rs 10,604 crore of the Rs 22,047 crore, and Rajasthan managed to go halfway (50.2%) or 19,650 crore of the Rs 39,148 crore. Tripura could only spend 41.3% or Rs 2,185 crore out of the budgeted Rs 5,285 crore, and Nagaland spent 47.7% or Rs 7,936 crore out of the Rs 16,650 crore, the analysis showed.

On the other hand, Maharashtra leads the pack with target achievement of 72.4%, with Rs 60,499 crore leveraged out of the budgeted Rs 83,530 crore for FY23. Amazingly, Kerala, which is a traditional laggard, comes in second, achieving 69.4% of the budgeted investment of Rs 19,330 crore, spending Rs 13,407 crore; and Uttar Pradesh comes third with 69% or Rs 93,555 crore of the Rs 1.35,677 crore. Uttarakhand is a close fourth with 68.4% of the Rs 11,987 crore; Meghalaya in fifth place (67.8% of Rs 3,233 crore), Bengal next with 67.6% of Rs 33,144 crore; Assam (64.5% of Rs 24,064 crore); Punjab (61.1% of 10,930 crores); Telangana (59.6% of Rs 29,064 crore).

Maharashtra and Uttar Pradesh alone, with budgeted capital expenditure of Rs 2.19 lakh crore, contribute 29.2% of the total but fared poorly, bringing the average of all states down to 70 % approximately, according to the analysis.

On the contrary, according to the report, the Center has achieved its objectives in terms of actual investments in various fields and disbursements of loans to States.

Punjab and Andhra – the two states at the top of the giveaway list – also exceeded their deficits.

Normally, states tend to wait until the fourth quarter to push projects and investments to assess their budget balances and therefore fail to identify enough projects in such a short period of time, leading to missing targets.