Will not cut down on capex of Rs 10 trillion in FY24: Finance Secretary

TV Somanathan

India will not cut down on the budgeted capital expenditure target of Rs 10 trillion in FY24 and thus there are no cash management guidelines or quarterly spend restrictions on ministries in order to give a push to capex, a top Finance Ministry official said.

“Capex we will not cut. That’s our commitment. We have removed all controls on capex, there are no cash management guidelines, no quarterly restrictions. On capex and schemes there are no restrictions. We are doing everything possible to push capex from our side,” Finance Secretary TV Somanathan told Moneycontrol.

Finance Minister Nirmala Sitharaman announced a 33 percent increase in capital expenditure for FY24, with a record Rs 10 trillion for infrastructure development, which is 3.3 percent of GDP.

“We are assuming that the entire capex will be spent. We have not decided to save money from capex,” he said.

The capex allocation for states in FY24 has been increased by Rs 30,000 crore to Rs 1.3 trillion.

“The capex target is much more this fiscal year but departments and states can easily absorb the extra expenditure. We are ready,” Somanathan added.

Railways and roads can absorb the additional capex as they form a big chunk, sources said.

However, whether the departments are ready to spend the additional capex still remains to be seen. In FY23, the capex target fell short by a marginal amount. The Centre’s capital expenditure stood at Rs 7.28 lakh crore against budgeted Rs 7.5 lakh crore.

“There might be some savings this fiscal as well. Ministries should not do bad projects just for the sake of spending. They should spend on good worthwhile useful investments, quality has to be there,” the sources added.