Archive · 25 Aug 2026
Indian States Accelerate Infrastructure Push to Drive Manufacturing
Indian states are building more roads, airports, power projects and industrial parks.
They hope these projects will make daily life better and persuade companies to invest.
The central government is giving states long-term, interest-free loans for construction.
State spending on infrastructure has increased as a share of the economy.
Uttar Pradesh is building expressways, airports and a defence manufacturing corridor.
Bihar is investing heavily in roads, railways and aviation.
Assam is expanding power infrastructure and developing cities as investment hubs.
Across the states, construction activity has nearly doubled in ten years.
Experts say infrastructure helps growth, but it must also be completed on time and built well.
States are expanding expressways, airports, power networks, waterways and logistics parks to improve services and attract investment.
States spend nearly 17% of their outlays on capital expenditure, compared with 23% for the Centre; Gujarat records the highest ratio at 30.3%.
The Centre’s special assistance scheme has allocated Rs 4.5 lakh crore in 50-year interest-free loans, helping state capex rise from 2.2% of GDP in FY22 to 2.7% in FY25 (RE).
Construction-sector GSVA across 33 states and UTs nearly doubled from Rs 8.38 lakh crore in FY15 to Rs 15.58 lakh crore in FY25.
Uttar Pradesh, Bihar and Assam are pursuing major infrastructure and industrial projects, but timely completion and quality remain key challenges.
- Who
- Indian state governments, supported by the Centre, are leading the infrastructure expansion; Uttar Pradesh, Bihar and Assam are highlighted.
- What
- States are increasing capital spending on transport, electricity, renewable energy, waterways, logistics and industrial infrastructure.
- When
- The comparison covers FY15 to FY25, with the Centre’s special assistance scheme launched in October 2020.
- Where
- Across India, particularly in Uttar Pradesh, Bihar and Assam.
- Why
- To improve citizens’ lives, support manufacturing and attract private investment.
- State capex share
- States spend almost 17% of their outlays on capital expenditure, compared with 23% for the Centre.
- Highest state capex ratio
- Gujarat records the highest ratio at 30.3%.
- Special assistance
- The Centre has allocated Rs 4.5 lakh crore through 50-year interest-free loans for state capital expenditure.
- State capex and GDP
- State capital expenditure increased from 2.2% of GDP in FY22 to 2.7% in FY25 (RE).
- Construction-sector GSVA
- GSVA from construction across 33 states and UTs rose from Rs 8.38 lakh crore in FY15 to Rs 15.58 lakh crore in FY25.
- Uttar Pradesh defence corridor
- Land has been allotted to 64 companies, with nearly Rs 13,500 crore in investments grounded and more than 42,000 jobs expected from committed investments.
- Bihar infrastructure allocation
- Bihar has allocated projects worth Rs 4 lakh crore for roads and bridges, Rs 1 lakh crore for railways and Rs 2,000 crore for aviation.
- Assam power allocation
- Assam’s recent Budget allocated more than Rs 72,000 crore to thermal, hydro, solar and battery-energy-storage projects.