The Centre is likely to miss its capital expenditure target for the fiscal at a time second quarter GDP growth has decelerated to 5.4 per cent.

Economists said the government will fall short of the target of ₹11.11 lakh crore by ₹60,000 crore to ₹1 lakh crore because of factors such as election related restrictions in the first quarter and extended rains.

Government spending data shows a stark contrast with targets: the Centre has met 42 per cent of its capex goal till October against 54.7 per cent a year ago.

The economists estimate the Centre must spend over ₹1.2 lakh crore per month during November-March to meet its target for the fiscal, an increase of 61 per cent.

“The Centre’s capex target was aspirational, but it has highlighted issues in absorptive capacity at both central and state levels,” they said.

The state governments have also struggled to absorb the Centre’s ₹1.5-lakh crore capex loan facility. Only ₹60,000 crore was disbursed between April and November, leaving ₹90,000 crore untapped.

This mirrors last year’s shortfall, where states used ₹1.05 lakh crore against a target of ₹1.5 lakh crore.

The slow uptake is attributed to stringent conditions tied to reforms and projects aimed at improving spending quality. “States face significant hurdles in scaling up capex,” said Madhavi Arora, an economist at Emkay Global, adding that weak state-level spending is exacerbating the economic slowdown.

Experts have called for recalibrating capex strategies to account for systemic limitations.

“Ambitious targets need to be balanced with realistic implementation capacities,” said Soumya Kanti Ghosh, SBI’s chief economic adviser.