Capex Run Rate
- State capex rises to 35% in H1
- Poll code comes into effect in March qtr
- It’ll put pressure on State capex
- States need to maintain 28% capex to meet Budget estimates
Mumbai: Several states are likely to miss their capital expenditure (capex) targets for the ongoing fiscal due to polls and fall in revenue, according to an analysis. A steep fall in revenue receipts will further lead to a major compression in state capex, which during the first half of FY24 rose to a record 35 per cent, Icra Ratings Chief Economist Aditi Nayar said.
To maintain their Budget estimates, 21 States -- whose capex and other macro data is available -- will have to ensure that the capex run rate is maintained at 28 per cent in the second half, which is unlikely, since model code of conduct is likely to take effect in the March quarter before the general elections, Nayar said.
The combined revenue and fiscal deficits of these 21 States widened to Rs70,000 crore and Rs 3.5 lakh crore, respectively, in the April-September period, from Rs 50,000 crore and Rs 2.4 lakh crore, respectively, in the year-ago period.
