Govt should survey private capex intentions, says Parliamentary panel

Capex key to achieve multiplier impact on growth and employment

To understand future trends and support the ongoing thrust on infrastructure spending, the Union government should survey the private sector's willingness for capital expenditure, the Parliamentary Standing Committee on Finance has recommended.

India’s statistics ministry or NITI Aayog should conduct forward looking surveys on “private sector capex investment intentions by industry and region," the panel said in its 61st report that was laid in the Parliament on July 27.

The committee, led by Bharatiya Janata Party leader Jayant Sinha, emphasized the need for such surveys even after the Ministry of Finance said that historical private capex (capital expenditure) data by the industry is available with the Ministry of Statistics and Programme Implementation (MOSPI) as part of the National Accounts Statistics Report.

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“These types of surveys will also help various suppliers prepare better for equipment, real estate, and workforce requirements associated with private sector capex,” the report said.

The panel also urged the government to closely monitor the progress of capital expenditure to ensure that the actual spending is in line with the allocated amount to achieve “the desired multiplier impact on growth and employment.”

India has been focusing heavily on infrastructure in recent years, especially since the onset of the coronavirus pandemic. The government’s capital expenditure allocations have been progressively increasing and the Budget for 2023-24 has set a record target of Rs 10 lakh crore. The Centre has also increased by 30 percent over 2022-23 the interest-free capex loans to states for the current fiscal to ensure a faster pace of capital spending.

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Noting this push on infrastructure, the parliamentary panel asked the government to ensure that capital expenditure allocations are met efficiently by both the Centre and states. “The Committee believes that the rise in capital expenditure would help achieve the objective of growth, job creation and be a cushion against global headwinds as one of the primary engines driving up consumption and leading the economy into a virtuous growth cycle,” it said in the report.