Govt committed to make sure capital expenditure continues to support growth momentum: CEA

The government is committed to ensure that capital expenditure will continue to support the economic growth momentum regained after the third COVID-19 wave, Chief Economic Advisor V Anantha Nageswaran said on Friday. The government has taken various steps — including lowering taxes, the continuation of privatisation, setting up institutions for sequestering bad loans and managing them and launching an asset monetisation drive — to strengthen the real economy.

"Given the ongoing sense of uncertainty among the private sector participants, both in banking and the non-banking world, the government is committed to making sure that capital expenditure continues (in) such (a way) that growth impulse that we have regained after the third wave is not surrendered," Nageswaran said while speaking at a banking event organised by Financial Express. In the previous fiscal, while the capital expenditure was budgeted at Rs 6 lakh crore, the government managed to spend Rs 5.92 lakh crore.

"And hence, for the current financial year, if the government is able to execute the capital expenditure of Rs 7.5 lakh crore, then that is the biggest real economic intervention," he said. Speaking about the banking industry, he said the sector has a very important role to play in sustaining the current growth scenario and turning the country's relative advantage today into a source of absolute growth advantage over other nations.