Centre spends 99% of capex target at Rs 9.48 lakh cr in FY24

Centre spends 99% of capex target at Rs 9.48 lakh cr in FY24

The Union government spent Rs 9,48,506 crore on capital expenditure in 2023-24 as against the revised estimates of Rs 9,49,555 lakh crore for 2023-24, showed government data on May 31.

The amount utilised by the Centre in 2023-24 was up 28.8 percent compared with expenditure on capital formation worth Rs 7,36,319 crore by the Centre last year in 2022-23.

After briefly getting affected due to heavy monsoon in the country in July and August last year, execution of formation work gathered pace in September.

In the month of March last year, Centre utilised Rs 1,42,893 crore as compared with Rs 1,49,292 crore in March last year, indicating a faster pace of approvals and implementation ahead of the Lok Sabha elections.

The union government's capital expenditure in April 2024 fell to Rs 99,235 crore, a 30.5 percent fall when compared to March 2024.

The capital expenditure during the first month of 2024-25 fiscal was driven by railways, road, and oil and gas sectors.

Capital Expenditure 2023-24

Since the pandemic, the Centre has been focusing on boosting expenditure on infrastructure in a bid to improve the quality of public expenditure. In fact, the push towards capex is expected to continue in FY25 with the government allocating Rs 11.1 lakh crore.

The ministry of road transport and highways and railway ministry have done the bulk of the expenditure given the higher allocation made to them. Other ministries like telecom and defence services too have contributed to the overall capex tally for the current financial year.

Earlier this month, Moneycontrol had reported that India may marginally miss the revised target for capital expenditure (capex) for 2023-24, seemingly due to the slightly lower utilisation of infrastructure loans by states, and a slowdown in spending due to elections.

In 2023-24, the ministry of road transport and highways has utilised funds worth Rs 2.643 lakh crore, compared with Rs 2.38 lakh crore crore last year. The ministry has spent 99.93 percent of the revised estimate worth Rs 2,64,525 crore for the current financial year.

The ministry has constructed 12,349 kms of national highways in FY24, the second highest in its history, but missed the target of 13,800 kms due to higher scrutiny on the quality of roads.

“This is the year we would have the highest-ever four-lane and high-speed access control road constructions. So even if the total construction is not the highest ever, the quality of the roads if you measure in terms of widening and speed, this is the highest ever,” MoRTH Secretary Anurag Jain had said in February.

India's highway construction slowed in the past two months as national elections started, stalling land acquisition approvals. About 483 km of national highways were constructed in April and 600 km built till May 20, data from the Ministry of Road Transport and Highways of India showed.

The pace of road construction in the first two months of FY25 was the slowest since the pandemic, according to the data seen by Moneycontrol.

The railway ministry too has exhibited a robust performance on capex utilisation in FY24. The ministry has spent 101 percent of the revised estimate on FY24 capex at Rs 2,42,581.61 crore. This is up 52.3 percent from the capex of Rs 1,59,256.15 crore done by the ministry in 2022-23

The Ministry of Agriculture & Farmers' Welfare, Ministry of Ayush, Ministry of Development of North Eastern Region, and Ministry of Earth Sciences saw the lowest capital expenditure outgo when compared to provisions made in the Budget in 2023-24.

A push to the economy via capital formation has remained the top priority for the government since 2021.

In the interim budget finance minister Nirmala Sitharaman has provided a target of capex to the tune of Rs 11,11,111 crore for 2024-25 and in the ongoing election campaign too infrastructure is the key promise of the government along with Viksit Bharat goal for the country by 2047.

“Building on the massive tripling of the capital expenditure outlay in the past 4 years resulting in huge multiplier impact on economic growth and employment creation, the outlay for the next year is being increased by 11.1 per cent to eleven lakh, eleven thousand, one hundred and eleven crore rupees (` 11,11,111 crore). This would be 3.4 percent of the GDP,” Finance Minister Nirmala Sitharaman said in her shortest budget speech ever as she presented the interim Budget of the government on February 1.

The government has increased the capex for 2024-25 by 11 percent to Rs 11.11 lakh crore. While this may be lower than the 15 percent increase, many from the industry were expecting, it is still significant and will spur infrastructure growth.

In 2023-24, large public sector utilities spent Rs 8.05 lakh crore towards capex, exceeding the budget target of Rs 7.42 lakh crore.