Capex engines to fire on all cylinders

livemint.com:

₹10 trillion for capex in FY24, a 37% rise from last fiscal. In FY23 and FY22, capex budgets were increased by 24% and 40%, respectively. However, infrastructure ministries including roads and railways have already used up more than 60% of their allocated capital, and are on course to finish the rest by January.

The central government hopes that savings in schemes run by other ministries can be diverted to capex so that overall expenditure remains within budgeted levels, the officials cited above added. The Union government has proposed to spend over ₹45 trillion in FY24, including more than ₹35 trillion in revenue expenditure and about ₹10 trillion in capital expenditure. Revenue expenditure does not result in the creation of assets and includes expenses for various services, interest payments, salaries and pensions.

Greater capex is seen to have a multiplier effect, as it creates new jobs and assets. The government believes it can trim some of the revenue expenditure if required and make room for more capex, the people cited above said. The government will stick to the fiscal deficit target of 5.9% of gross domestic product set for the fiscal, the first person mentioned above said.

“It is likely that the disinvestment target will not be met this fiscal. However, the government expects higher non-tax revenues, including dividends from the Reserve Bank of India and state-run banks, and buoyant tax proceeds to offset any revenue shortfall from disinvestment to maintain the fiscal deficit target," the person added. A finance ministry spokesperson didn’t respond to emailed queries.