Finance Minister Nirmala Sitharaman set capital expenditure at ₹12.2 trillion in the Union Budget 2026-27, marking the highest capex-to-GDP ratio in a decade at 4.4%. Effective capex, which includes grants-in-aid to states for asset creation, reached ₹17.15 trillion. Since 2020-21, when capital spending stood at 1.7% of GDP, capex has climbed to 2.9% in typical years and 4% in 2024-25. The fiscal deficit fell from 9.2% of GDP in 2020-21 to 4.3% in the current budget, whilst central government debt is projected at 55.6% of GDP for 2026-27.
Yet, these figures answer only one question. Has this spending built public wealth—assets minus liabilities—or has it added to debt whilst leaving those assets unrecorded?
The World Inequality Report 2026, released in December 2025, offers a troubling global answer. Private wealth across the world rose from roughly 350% of income to over 500% since the 1990s. Public wealth stagnated near 80-90% over the same period. In several regions, government liabilities now exceed government assets, pushing public wealth into negative territory. Economies have grown richer. Governments, measured on their own balance sheets, have grown poorer.
India's numbers in the same report point to a parallel problem. The top 10% of earners capture 58% of national income, up from 57% in 2022. The top 10% hold 65% of total wealth; the top 1% alone hold 40%. This concentration matters because a government cannot assess its own wealth without first understanding whether public assets are distributing returns broadly or narrowly. The global pattern—private wealth expanding whilst public wealth stalls—warrants urgent examination of India's public books.
Missing Assets
That examination is difficult because India does not keep the right books. The Controller General of Accounts prepares Union government accounts on a cash basis, recording what was spent, not what is owned. A highway built in one year appears as expenditure in that year, but never appears on a consolidated balance sheet. Depreciation is ignored. The Comptroller and Auditor General audits appropriation accounts, not public sector net worth. The International Monetary Fund's public sector balance sheet database relies on best-efforts compilation because most countries, India included, do not produce audited government balance sheets.
India tracks three distinct categories poorly. Expenditure is what the budget records line by line. Asset creation is capex's intended output: highways, railway corridors, digital infrastructure built on Aadhaar and UPI, rural water connections under Jal Jeevan Mission, hospitals and schools. Wealth accumulation is the net position after subtracting liabilities, accounting for depreciation, and weighing maintenance backlogs against projected returns. India reports the first category meticulously, the second through scattered project completion data across ministries, and consolidates the third nowhere.
The National Monetisation Pipeline offers a partial precedent for asset-level accounting. NITI Aayog launched NMP 2.0 in February 2026 with a target of ₹16.72 trillion over five years, more than double the ₹6 trillion target under NMP 1.0. The programme leases operational public assets, including highways and power transmission lines, to private operators whilst the government retains ownership. Asset monetisation puts a market-tested value on public assets that would otherwise sit unpriced. It functions as a piecemeal appraisal, not as comprehensive valuation.
Urgent Reckoning
A comprehensive valuation would answer what citizens and Parliament need to know: does ₹12.2 trillion in annual capex grow the state's net worth or chiefly replace depreciating assets while debt accumulates? Central government debt is set to rise from ₹200.53 trillion in March 2026 to ₹218.63 trillion by March 2027. Combined central and state government debt runs close to 82% of GDP. Interest payments have become one of the largest line items in the Union Budget. A government whose balance sheet is growing because both assets and liabilities are expanding looks fundamentally different from one building net worth.
Countries that publish general government balance sheets, including Australia and New Zealand, report net worth as a routine fiscal indicator alongside deficit and debt. Their finance departments value public land, buildings, infrastructure and financial assets, subtract liabilities, and publish annually. India has moved toward accrual accounting in pilot form through the Controller General of Accounts but has not extended this to a published, audited national balance sheet.
For a country targeting developed-economy status by 2047, the composition of national wealth deserves scrutiny equal to GDP growth. Capital expenditure figures answer how much India spends. A public wealth account would answer what India owns, what it owes, and who benefits when assets are built or monetised. Until India publishes a consolidated account of public assets and liabilities, capex-led growth will keep producing strong numbers whilst leaving a more consequential column blank.
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