According to the latest Reserve Bank of India study on State finances,

by

According to the latest Reserve Bank of India study on State finances, capital spending is maximum on

rural development
water supply and sanitation
urban development
education
This question was previously asked in
UPSC CDS-2 – 2018
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The correct answer is urban development.
According to Reserve Bank of India studies on State finances for the period around 2017-2018, Capital Outlay by states was maximum on Urban Development. This sector often includes significant infrastructure projects like urban transport, housing, water supply, and sanitation within urban areas.
Capital spending by states is crucial for infrastructure creation and long-term economic growth. While sectors like education, water supply & sanitation, and rural development also receive capital expenditure, Urban Development, which encompasses various infrastructure categories within growing cities, has often accounted for the largest share in recent years according to RBI reports.

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