Capex in slow lane but govt looks to rev it up

New Delhi: Capital expenditure by select central public-sector enterprises (CPSEs) and other government organizations in the first four months of this fiscal stood at Rs1.84 lakh crore, or about 28 per cent of Budget estimates of Rs6.62 lakh crore.

The Finance Ministry had reportedly directed the key infrastructure ministries and departments in the first week of June to expedite projects. It even wanted at least 60 per cent of the capex target for 2022-23 to be achieved by the end of the first half of the fiscal—that is, by the end of September.

But North Block's aggressive push for speedier capex doesn't appear to have had the desired effect, for in the first four months it was lower than not just the target set in June but also the budgetary target.

In her Budget speech this year, Finance Minister Nirmala Sitharaman said that "the virtuous cycle of investment requires public investment to crowd in private investment. At this stage, private investments seem to require that support to rise to their potential and to the needs of the economy. Public investment must continue to take the lead and pump-prime the private investment and demand in 2022-23."

In Budget 2022-23, the central government allocated Rs134,015 crore to the National Highways Authority of India (NHAI), Rs76,549 crore to the Ministry of Housing and Urban Affairs, and Rs84,587 crore to the Department of Telecommunications to create and augment telecom infrastructure in the country.

Even though capex has not been as much as the government had desired, it hopes that this would help the private sector commence the capital expenditure cycle by building on the government's push to capex, officials tell Bizz Buzz.

Greater capex will also help expand bank credit and boost manufacturing, they said. Manufacturing firms are also likely to benefit from easing of input prices and a higher consumer demand during the forthcoming festive season.