Capex flexibility tops states' budget wishlist

Kerala, Punjab call for special financial packages, higher borrowing limits

- Gireesh Chandra Prasad

State governments on Friday sought extra headroom for their borrowings and greater fiscal support for their capital expenditure from the Centre, while advocating an expansionary union budget for FY26 to arrest an economic slowdown and a weakening currency.

States also advocated that macroeconomic challenges should be comprehensively addressed in the Union budget. Punjab and Kerala sought special financial packages including more loans, grants, and borrowing flexibility.

Ministers from 28 states, including some of the chief ministers and deputy chief ministers, attended Union finance minister Nirmala Sitharaman's budget consultations on Friday. Officials from Delhi, Nagaland and Chhattisgarh attended the meeting in place of their ministers.