Read the fine print on govt's big capital expenditure
2 years, 2 months ago

Read the fine print on govt's big capital expenditure

Live Mint  

As the economy struggled to find its feet following the pandemic-led disruptions, the Centre announced record capital expenditure to offer much-needed support. However, the basic expectation—that public capex would set the wheels of the economy running, and private companies would join in—hasn’t quite materialized. While the Centre has spent 46% of its capex plan in the six months till September, no major state comes close, despite having fiscal space to spend more than their Budgeted amount. Thirteen major states have a massive combined fiscal space of ₹7.4 trillion for capital spending in 2022-23, 29% over their budgeted ₹5.8 trillion, ICRA said in a report last month. Since a number of factors are limiting private investments, states’ capex and consumption demand, the Centre may have to look at its own spending patterns to push for better results.

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History of this topic

Will the government be able to meet its capex target for FY25?
1 week, 2 days ago

Will the government be able to meet its capex target for FY25?

Live Mint  

A month ahead of the budget presentation, the union government is considering a plan to ease conditions states to obtain 50-year interest-free loans for capital expenditure in an effort to close in on its target for 2024-25. The union government's capex, which it has used to stimulate the economy since the covid-19 pandemic, has been lacklustre this year, having hit …

Centre weighs easing conditions for interest-free capex loans to states
1 week, 2 days ago

Centre weighs easing conditions for interest-free capex loans to states

Live Mint  

New Delhi: States may find it easier to get 50-year interest-free loans for capital expenditure from the Centre in the last quarter of the current fiscal year. “The idea is to fast-track the disbursement of interest-free capex loans during the last quarter of the fiscal to encourage states to spend more on capital expenditure," the first person mentioned above said. …

States push for more fiscal room, seek expansionary Union budget
3 weeks, 4 days ago

States push for more fiscal room, seek expansionary Union budget

Live Mint  

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. Ministers from 28 states, including some of the chief ministers and deputy chief ministers, attended Union finance minister Nirmala Sitharaman’s budget consultations …

States push for more fiscal room, seek expansionary Union budget
3 weeks, 4 days ago

States push for more fiscal room, seek expansionary Union budget

Live Mint  

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. Ministers from 28 states, including some of the chief ministers and deputy chief ministers, attended Union finance minister Nirmala Sitharaman’s budget consultations …

Centre to make highest-ever effective capital expenditure in fiscal year 2024-25, know what it is
4 weeks ago

Centre to make highest-ever effective capital expenditure in fiscal year 2024-25, know what it is

India TV News  

The Central government is set to make the highest-ever effective capital expenditure in the fiscal year 2024-25, Union Finance Minister Nirmala Sitharaman said during the proceedings in Lok Sabha. Sitharaman on Tuesday stated that the effective capital expenditure of the Union govt for this fiscal year is pegged at a staggering Rs 15.02 lakh crore, among the highest such spending …

Industry needs to up R&D spend, expect govt capex growth to sustain: Ficci
1 month ago

Industry needs to up R&D spend, expect govt capex growth to sustain: Ficci

Live Mint  

New Delhi: Businesses need to step up their research and development spending, and the industry expects the government to sustain the growth in budget allocation for capital expenditure as these two would help the Indian industry to become more competitive in global markets, Harsha Vardhan Agarwal, president of Federation of Indian Chambers of Commerce and Industry, and vice-chairman and managing …

India needs reliable data to track capital expenditure across the economy
1 month ago

India needs reliable data to track capital expenditure across the economy

Live Mint  

In 2014, Narendra Modi rode to power promising to kick-start a new investment cycle and end an era of ‘policy paralysis.’ Soon after becoming Prime Minister, he identified the revival of stalled projects as a key priority. For instance, the Annual Capital Expenditures Survey conducted by the US Census Bureau provided data on the capex of American companies for decades, …

‘Centre, state CPSE capex could decline in FY25’
1 month ago

‘Centre, state CPSE capex could decline in FY25’

Live Mint  

New Delhi: Capital expenditure by central infrastructure ministries, central public sector enterprises and state governments is expected to slow in FY25 after rising to a five-year high of 5.87% of GDP in FY24 due to reduced spending in the first two quarters, two people familiar with the matter said. "The Centre will continue its capital expenditure push in the upcoming …

Centre likely to maintain capex push in FY26 to aid economic growth amid sluggish state spending
1 month, 1 week ago

Centre likely to maintain capex push in FY26 to aid economic growth amid sluggish state spending

Live Mint  

NEW DELHI : The Centre may maintain its capital expenditure at around 3.4% of the nominal gross domestic product during 2025-26, nearly the same as the current fiscal year’s target, in a bid to prop up economic growth amid falling state spending, two people close to the matter said. “The Centre is expected to maintain its capex push in the …

Centre likely to miss ₹1.5 trillion capex loan target for states in FY25
1 month, 1 week ago

Centre likely to miss ₹1.5 trillion capex loan target for states in FY25

Live Mint  

The Centre is likely to fall short of fully utilizing the budgeted allocation for states under the ‘Special Assistance for Capital Investment’ scheme in 2024-25, as state spending took a hit during the general elections and a slowdown in economic growth, particularly in the first two quarters, two people aware of the matter told Mint. "While the capital expenditure at …

Capex slowdown helps govt cut deficit by 6.6 per cent in Apr-Oct
1 month, 2 weeks ago

Capex slowdown helps govt cut deficit by 6.6 per cent in Apr-Oct

New Indian Express  

NEW DELHI: The slowing down of capital expenditure has helped the central government keep its books in order with fiscal deficit contracting by 6.6% in the first seven months of the current financial year, according to the data released by the government. The fiscal deficit during the period was Rs 7.5 lakh crore, which is 46.5% of the budget target …

Centre eyes 95% of undershot capex target for FY25: Ajay Seth
1 month, 3 weeks ago

Centre eyes 95% of undershot capex target for FY25: Ajay Seth

Live Mint  

New Delhi: The government’s capital expenditure for FY2025 is projected to align closely with last year’s spending, at around 95% of the allocated target, though the target itself may be undershot, Ajay Seth, secretary of the department of economic affairs said on Wednesday. Last year, we spent 95% of the allotted capex, and this year it is likely to be …

Govt plans survey of lagging private capex
3 months, 2 weeks ago

Govt plans survey of lagging private capex

Hindustan Times  

The statistics ministry is planning to conduct a survey of private-sector capital investment going into the economy, which has been lagging government capex but is critical for growth and jobs in Asia’s third-largest economy, a senior official has said. Private sector investment has grown at a slower pace, outstripped by government fixed capital formation, a measure of public spending on …

New, emerging sectors primed for heavy lifting
5 months, 3 weeks ago

New, emerging sectors primed for heavy lifting

Live Mint  

A raft of policy initiatives mounted in recent years appear to be ever so gradually stoking private sector capital expenditure. First, growth stability, spillover from government investments in linked sectors, the Production Linked Incentive scheme and subdued commodity prices have meant the contribution of the private sector is cautiously inching up, as evident in the improving share of GFCF from …

New private investments dropped over 15% in 2023-24; States led capex growth
8 months, 4 weeks ago

New private investments dropped over 15% in 2023-24; States led capex growth

The Hindu  

Fresh investment plans by the private sector fell 15.3% in 2023-24, while foreign investors slashed new outlays by almost a third, dragging down the value of new investment announcements in the country almost 5% from the all-time high of almost ₹37 lakh crore recorded in 2022-23. Manufacturing’s share in new investments, declined from almost 54% in 2022-23 to 33.8% of …

Corporate sector capex to fuel economic growth: RBI
10 months, 3 weeks ago

Corporate sector capex to fuel economic growth: RBI

New Indian Express  

NEW DELHI: The Reserve Bank of India, in its February bulletin, on Tuesday said the fresh round of capex by corporate sector would likely fuel the next leg of economic growth. As per the apex bank, notable fixed asset growth is seen in oil, gas, and chemicals, while sectors like steel and automobiles lag in fixed asset additions despite strong …

Lacklustre capex by PSUs is blunting government’s growth stimulus
11 months, 1 week ago

Lacklustre capex by PSUs is blunting government’s growth stimulus

Live Mint  

The Narendra Modi government’s strategy for supporting growth has been to increase capital expenditure through its budget in the hope that the infrastructure created would nudge the non-government sector to invest, creating new incomes. FY25 will be the fourth successive year in which more than half the growth in the total spending through the budget will be due to higher …

The budget does well on both the big Cs: Capex and consolidation
11 months, 1 week ago

The budget does well on both the big Cs: Capex and consolidation

Live Mint  

Emphasis on the two big Cs—Capex and Consolidation—was the hallmark of India’s interim budget for 2024-25. The government’s concerted focus on capex-led growth has kept the economy in good stead, aiding its emergence as the fastest-growing major economy in the world for three consecutive years by logging 7%-plus real gross domestic product growth. The budget ticked all the boxes on …

Increased Capex on Infra to Spur Steel Demand, Attract investments, Say Experts
11 months, 1 week ago

Increased Capex on Infra to Spur Steel Demand, Attract investments, Say Experts

Deccan Chronicle  

NEW DELHI: The increased capex on infrastructure in the budget will spur domestic steel demand, attract investments and create job opportunities, industry players and experts said. Anubhav Kathuria, Director, Synergy Steels said the expansion of PM-Awas Grameen Yojana to 2 crore more houses and the conversion of 40,000 existing railway bogies to Vande-Bharat standards besides the three new railway economic …

Interim Budget surprises fixed income market
11 months, 1 week ago

Interim Budget surprises fixed income market

New Indian Express  

It was expected to be a restricted vote on national accounts, but this interim budget, instead, surprised fixed income markets so much so that the yield of India’s benchmark 10-year government security fell by 9 bps. Firstly, in FY24, not only did India manage to achieve the highest economic growth on the back of heavy public capex, but it did …

A case of capex under the ‘macroscope’
11 months, 1 week ago

A case of capex under the ‘macroscope’

The Hindu  

India’s economic recovery in the early post COVID-19 pandemic phase was distinctly underscored by a strong performance in exports and domestic investments. The FY25 Interim Budget carries forward the ethos of public capex a notch higher, thereby bolstering the government’s commitment to high quality spending. The budgeted capex by the central government, an important metric for capacity creation in the …

Interim budget 2024-25: Capex raised to 3.4% of GDP despite fiscal consolidation
11 months, 1 week ago

Interim budget 2024-25: Capex raised to 3.4% of GDP despite fiscal consolidation

Hindustan Times  

The central government’s capital spending in 2024-25, according to the interim budget will be ₹11,11,111 crore, a number which is more like an auspicious figure than a hard-headed budgetary allocation. Read here: Interim budget 2024-25: Govt stays the course on fiscal consolidation path Fiscal numbers of the second Narendra Modi government speak for themselves. The share of capital spending in …

Interim Budget 2024: Overall spending likely to see 10% hike, says report
11 months, 4 weeks ago

Interim Budget 2024: Overall spending likely to see 10% hike, says report

India Today  

The upcoming interim budget for the fiscal year 2024-25 may witness a cautious approach from the government, with an anticipated 10 per cent increase in overall spending compared to the current fiscal year, reported The Economic Times. Despite the economy's robust growth, with a forecasted 7.3 per cent increase in Gross Domestic Product for the fiscal year 2023-24, the government …

Centre to take foot off capex pedal after FY25 budget
1 year ago

Centre to take foot off capex pedal after FY25 budget

Live Mint  

NEW DELHI : After an expected spurt in the next fiscal year, government capital expenditure may grow at a more sedate pace in the years ahead as the Centre sets its sights on fiscal consolidation, two people aware of the plans said. A second reason for the modest increase in capex after 2024-25 is the saturating fund absorption capacity of …

Highways Ministry, Railways Achieve Around 40% Capital Expenditure Till July, Aim to Spend 90% by December
1 year, 4 months ago

Highways Ministry, Railways Achieve Around 40% Capital Expenditure Till July, Aim to Spend 90% by December

News 18  

With about eight assembly polls and the Lok Sabha elections scheduled in the next one year, the Union government is prioritising its spending. Of the Rs 5 lakh crore allocated to these ministries for the current financial year, the two have already spent Rs 2.06 lakh crore by July-end. According to a Railway Ministry official, by July-end, the national transporter …

Explained: The logic behind long-term capex loans for states
1 year, 11 months ago

Explained: The logic behind long-term capex loans for states

Live Mint  

Union budget 2023-24 has proposed to continue with the 50-year interest-free loan to state governments that aid infrastructure investment. Most of it would be at the discretion of states, while parts of the expenditure will also be linked to, or allocated for, scrapping old government vehicles; urban planning reforms; financing reforms in urban local bodies to make them creditworthy for …

Capex bet and a welfare miss: Story of Budget in nine charts
1 year, 11 months ago

Capex bet and a welfare miss: Story of Budget in nine charts

Live Mint  

In the last full-year Budget before the 2024 general elections, finance minister Nirmala Sitharaman delivered her shortest speech, hitting all the right notes. HEARTY CAPEX In 2023-24, which is likely to see a global growth slowdown, the Centre has budgeted a record capital expenditure of ₹10 trillion, up nearly 37% from the revised estimate of the ongoing year. Meanwhile, following …

Great Budget for CapEx and Railways, Not Bad for Direct Taxes - News18
1 year, 11 months ago

Great Budget for CapEx and Railways, Not Bad for Direct Taxes - News18

News 18  

Finance Minister Nirmala Sitharaman began her speech by calling Budget 2023 the first one in Amrit Kaal. Unfortunately, there were few takers for the new scheme because one could pay fewer taxes by using the various exemptions in the old scheme. There will be less complicated tax calculations involved in using the exemptions and actually lower tax liabilities just by …

The forced capex gamble in Budget 2023
1 year, 11 months ago

The forced capex gamble in Budget 2023

New Indian Express  

The more important question is, where is the money for such large government expenditure coming from? The government cannot increase tax collections dramatically since its tax structure is already skewed, with a heavy burden on the common people to the benefit of corporates who have not reciprocated. The Economic Survey tells us that demand for NREGA work continues to be …

Union Budget 2023-24: Aiming For A Fine Balance
1 year, 11 months ago

Union Budget 2023-24: Aiming For A Fine Balance

News 18  

The Indian economy has been recovering well from the pandemic. With this context, restricting GFD/GDP to around 5.8 per cent should be targeted and ensure the government remains committed to the target of reaching 4.5 per cent by FY2026. We see five key reasons for a limited space for a “populist” Budget — Lower tax revenue growth, given lower GDP …

Credit challenges: On credit flow and all-round capital spending
2 years ago

Credit challenges: On credit flow and all-round capital spending

The Hindu  

The Reserve Bank of India’s ‘Report on Trend and Progress of Banking in India’, paints a picture of credit growth having rebounded smartly, with the consolidated balance sheets of Indian commercial banks showing double-digit expansion after a seven-year gap. With retail inflation and concerns about price stability eroding savers’ real returns as well as confidence to save, banks have found …

Only a handful of large firms ready for big spending
2 years, 2 months ago

Only a handful of large firms ready for big spending

Live Mint  

MUMBAI : Finance minister Nirmala Sitharaman’s expectation that private sector capital spending will power India’s economic growth appears to be wishful thinking as most companies, barring a handful of large conglomerates and state-run corporations, remain wary of new investments amid rising interest rates. Bankers said that the private capex cycle is quite uneven as large spending is mainly restricted to …

The Indian capex wheel has begun to take a green turn
2 years, 8 months ago

The Indian capex wheel has begun to take a green turn

Live Mint  

Corporate capital expenditure in India is poised for a leap in a new direction—green investments. Industrial capex, which comprised only a fourth of overall annual average capex of about ₹12 trillion in the past five fiscal years, is estimated to have grown at a pace of over 30% in 2021-22, far faster than the compound annual growth rate of 6% …

A Nudge and A Multiplier Effect: Why FM Has Budgeted for Capital Expenditure
2 years, 11 months ago

A Nudge and A Multiplier Effect: Why FM Has Budgeted for Capital Expenditure

News 18  

The economy is recovering but it still needs the government to spend on building assets that can lay the foundation for overall growth. Hence, Finance Minister Nirmala Sitharaman in her fourth Budget and in a concise speech focused on the attention where this capital expenditure should take place. This includes Rs 1 lakh crore earmarked as special borrowing by states …

Greater capital expenditure is the highlight of the Budget
2 years, 11 months ago

Greater capital expenditure is the highlight of the Budget

The Hindu  

This Budget has made some very effective announcements to accelerate growth as we come out of a prolonged pandemic which has weighed on growth significantly. Here are some takeaways: Capex and deficits For FY22, the revised estimate for capex stood at ₹6 trillion, but excluding the one-time Air India charge, it would have been closer to ₹5.5 trillion. In terms …

Capex hike to social sector cuts: The story of Budget 2022, in nine charts
2 years, 11 months ago

Capex hike to social sector cuts: The story of Budget 2022, in nine charts

Live Mint  

An aggressive focus on government spending led on the capital side was the big theme of Finance Minister Nirmala Sitharaman's second pandemic budget. We explore Budget 2022 in nine charts: Dissecting the capex For an economy emerging out of a pandemic, Finance Minister Nirmala Sitharaman was expected to ramp up the capital expenditure markedly. Welfare cuts Unlike last year, Sitharaman …

FM Sitharaman Pushes Large CPSEs to Meet 75% of FY21 Capex Target by Dec Against Covid Slump
4 years, 2 months ago

FM Sitharaman Pushes Large CPSEs to Meet 75% of FY21 Capex Target by Dec Against Covid Slump

News 18  

Finance Minister Nirmala Sitharaman on Monday exhorted large central public sector enterprises to achieve by December 75 per cent of their planned capital expenditure target for 2020-21, to support economic growth hit by the COVID-19 crisis. While reviewing the performance of CPSEs, Sitharaman said capex by CPSEs is a critical driver of economic growth and needs to be scaled up …

FM urges CPSEs to meet 75% of capex target by Dec-end
4 years, 2 months ago

FM urges CPSEs to meet 75% of capex target by Dec-end

Live Mint  

New Delhi: Finance Minister Nirmala Sitharaman on Monday nudged central public sector enterprises to meet three-fourth of the capital expenditure target by the third quarter of the current fiscal to help the economy recover from the covid-19 induced slowdown. While reviewing the performance of CPSEs, the finance minister also said that capital expenditure of CPSEs needs to be scaled up …

Two-third of budgeted capex achieved by the govt: CEA
5 years, 1 month ago

Two-third of budgeted capex achieved by the govt: CEA

Live Mint  

A series of measures taken by the government in the last few months to revive growth has started showing some results and the Centre will continue to support the industry and intervene as and when required, finance minister Nirmala Sitharaman said on Friday. In a presentation, chief economic adviser Krishnamurthy Subramanian listed the measures taken by the government to boost …

To boost economy, Sitharaman asks CPSEs to front load FY20 capex
5 years, 3 months ago

To boost economy, Sitharaman asks CPSEs to front load FY20 capex

Live Mint  

Finance minister Nirmala Sitharaman on Saturday asked 32 large central public sector enterprises to frontload their capital expenditure and clear all dues of all goods and service providers by 15 October. CPSEs have also been asked to build a portal by 15 October where delay in payments can be monitored on a regular basis, Sitharaman said after reviewing the capex …

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