Centre will sustain capex: Expenditure secretary Manoj Govil

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Subscribe to enjoy similar stories. NEW DELHI : The central government will maintain its focus on capital expenditure in the final quarter of 2024-25, and the year ahead, despite a dip in the first half of the year, expenditure secretary Manoj Govil said on Monday.

States will also increase their borrowing under the Centre’s Special Assistance for Capital Investment scheme, potentially exceeding the limits set in the revised estimates, he added. Speaking to Mint, Govil said while states have borrowed about ₹1.09 trillion till January from the Centre under the scheme, which provides 50-year interest-free loans, they could exceed the budgeted estimates of ₹1.25 trillion in the fiscal year.

"We want states to spend more, and states are spending more as well (on capital expenditure)," Govil added. He said the central government remains committed to capital infrastructure spending, with grants-in-aid for capital assets set to rise to " ₹4.27 trillion in 2025-26 from about ₹2.99 trillion in the 2024-25 revised estimates, pushing the budget’s effective capital expenditure allocations to ₹15.5 trillion, up 17.4% from ₹13.2 trillion in the previous year." "The money which the Government of India spends either directly through its own agencies or indirectly through state governments, results in the formation of capital assets," he said.

"So, I would say the budget is still very much focused on increasing capital expenditure," he added. In 2023-24, capital expenditure by the Centre, Central Public Sector Enterprises (CPSEs), and state governments reached ₹17.35 trillion, or 5.87% of gross domestic product (GDP), marking an increase from ₹13.57 trillion, or 5.03% of GDP, in 2022-23, according to data from the finance ministry.