India aims to achieve 60% of capital expenditure target by September to keep inflation at bay


Finance Ministry key is asked basic infrastructure Ministries and departments to expedite projects, setting a target of achieving at least 60% of the FY 2013 capital expenditure budget target by the end of September. North Block wants to step up capital expenditure to support an economy hit by high inflationGeopolitical risk and monetary tightening.

A government official told ET, “Our target is to achieve around Rs 4.45 lakh crore by the September quarter, which is 60 per cent of the annual target.

The government has budgeted a capital expenditure of Rs 7.5 lakh crore in FY12 to boost economic revival, up from Rs 6.02 lakh crore in FY12. Another official said ministries and departments have been asked to submit detailed monthly plans and progress reports, giving specific reasons for the delay in project implementation.

The official said the expenditure department will also closely monitor the projects to ensure that there is no wasteful expenditure as the target is pushed forward.

monthly review meeting

“There will be a review meeting every quarter where it will be discussed and resolved at the earliest,” the official said.

The move seeks to allay concerns that additional food and fertilizer subsidies as well as reduction in duty on petrol, diesel and edible oils, apart from key industrial inputs, are likely to be capitalized by the Center for relief measures to pacify inflation. Budget cuts can be made. The reduction in duty incurs a revenue cost of about Rs 1.5 lakh crore.

capex

Officials say that even if the government has to cut expenditure, it will cut revenue expenditure. Last month, Finance Secretary TV Somanathan told ET that the government would stick to budget spending on capital, which is essential for the long-term growth of the economy. Experts Said Frontloading capex The economic recovery will help, which is still vulnerable to global adverse conditions.

“Frontloading expenditure is a good move as it will help the economy and also help in tackling some of the global constraints,” it said.

Chief Economist DK Joshi. “The Center has increased subsidies, so they are increasing their overall spending to support growth.” India’s economic growth slowed to a four-quarter low of 4.1% in the January-March period.

strong start

In April 2023, the cumulative capital expenditure of all departments and ministries stood at Rs 78,925 crore, up 67.5% from Rs 47,126 crore spent in the same month a year ago. Of the Rs 78,925 crore spent on capital account in April, highways and railways contributed about Rs 58,500 crore. The Ministry of Road Transport and Highways (MoRTH) has a capital expenditure budget of Rs 1.18 lakh crore in the current fiscal. It spent Rs 40,318 crore in April, which was about 21% of the annual target.

The Ministry of Railways spent ₹18,199 crore in April, which is 13% of its annual capital expenditure budget of ₹1.37 lakh crore. In April last year, the Railway Ministry had spent Rs 13,000 crore in the capital account.



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