Six states account for 67 percent of bank-sanctioned project costs in FY26 as private investment grows

Six states led by Maharashtra and Gujarat accounted for 67.1 percent of the total project costs sanctioned by banks and financial institutions during the 2025-26 period. A Reserve Bank of India study shows that the total cost of projects approved by select banks and financial institutions rose to Rs 4.4 lakh crore in FY26, up from Rs 3.7 lakh crore in the previous year. Maharashtra took the top spot from Gujarat by securing projects worth about Rs 88,880 crore, which is 20.2 percent of the total sum. Gujarat followed closely with Rs 78,760 crore, or 17.9 percent, while Rajasthan recorded Rs 48,840 crore at 11.1 percent. Karnataka, Andhra Pradesh, and Tamil Nadu also formed part of the top group, holding shares of 7.9 percent, 5.8 percent, and 4.3 percent respectively. Together, these six states captured roughly Rs 2.96 lakh crore of the total sanctioned funds. In contrast, northern states like Uttar Pradesh, Bihar, and Madhya Pradesh lagged far behind in attracting these funds. The RBI study, written by Purnendu Kumar, Snigdha Yogindran, Sukti Khandekar, and Bhavyashree K, notes that this growth highlights steady investment plans within the private corporate sector. Beyond bank financing, companies tapped alternative funding channels during the year. About 509 private non-financial firms raised nearly Rs 1 lakh crore via external commercial borrowings for capital spending. Another 298 companies raised Rs 23,809 crore through domestic initial public offerings. When combining bank-financed projects and other funding sources, total investment intentions reached 1,839 projects worth Rs 5.6 lakh crore in FY26, compared to 1,581 projects worth Rs 5 lakh crore in FY25. The report also highlights a change in project sizes, with a rise in mega projects costing over Rs 5,000 crore in the post-Covid era, even though smaller projects under Rs 100 crore still make up the majority by count.