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Budget 2023Budget 2023

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In Graphic Detail: India's capex conundrum in four charts

In graphic detail is a special short data series covering the Union Budget's key elements over a short and long-term period

January 27, 2022 / 02:46 PM IST

The quality of the government expenditure is a long-running debate. While the importance of increasing capital expenditure is recognised, large revenue expenditure commitments such as interest payments and the inherent nature of capital expenditure delivering results in the medium-to-long term have seen successive regimes making meagre allocations.

The COVID-19 pandemic and the resultant hit to economic growth, however, has forced a visible shift to more long-term thinking. The Centre's capital expenditure target in FY22 was Rs 5.54 lakh crore, more than twice of what was spent as recently as FY18.

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But the sharp increase in the capital expenditure target is not so easily met. In the first eight months of the current financial year, the central government has managed to spend only 49.4 percent of the full-year allocation. The last time the utilisation rate was similarly low was in FY13, when only 50 percent of the full-year target was achieved in the first eight months of the financial year.