Six states account for 67% of FY26 project sanctions as private investment cycle gains pace

Six Indian states -- Maharashtra, Gujarat, Rajasthan, Karnataka, Andhra Pradesh and Tamil Nadu -- accounted for 67.1% of all project costs sanctioned by banks and financial institutions in the fiscal year 2025-26, according to a Reserve Bank of India study. Maharashtra led with a 20.2% share, at Rs 88,880 crore, surpassing Gujarat's 17.9% share, or Rs 78,760 crore. Together, these six states received about Rs 2.96 lakh crore, or 67.1%, of the total sanctioned project value of Rs 4.4 lakh crore during 2025-26.

The increase in project sanctions reflects a strengthening investment cycle, with the total cost of sanctioned projects rising to Rs 4.4 lakh crore in 2025-26 from Rs 3.7 lakh crore in 2024-25. The RBI report suggests sustained investment intentions from the private corporate sector, and expects the investment outlook to remain healthy in 2026-27.

Notably, larger projects are gaining prominence, with the number of mega projects (those costing Rs 5,000 crore or more) increasing from pre-COVID levels. These larger projects make up a disproportionate share of total investment, indicating a shift in the investment landscape. The data indicates higher investment intentions, growing participation from non-bank sources, and an increase in project size, which may signal further momentum for the private-sector investment cycle.