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Tuesday, October 26, 2021

Spends lagging, FinMin asks ministries to step up capex

As against the annual capital expenditure estimate of Rs 1.08 lakh crore, the Ministry of Road Transport and Highways has achieved capex of 45 per cent at Rs 48,403 crore in April-July.

Written by Sunny Verma | New Delhi |
September 28, 2021 3:15:24 am
Sitharaman said in addition to economic relief measures, India has undertaken significant structural reforms to turn the crisis into an opportunity and emerge stronger. (File)

The Finance Ministry has suggested other Ministries and departments to push up capital expenditure in the remaining two-quarters of the current fiscal, as government capex in the April-July period lagged the expansion outlined in Budget 2021-22. As against a Budget Estimate of Rs 5.54 lakh crore of capex for the entire year, growth of around 35 per cent over the previous year, actual capex in April-July was Rs 1.28 lakh crore, growth of about 15 per cent.

The Finance Ministry held a meeting with key officials of other Ministries and departments last week and discussed the need to step up spending on infrastructure projects. Last Friday, the government removed spending curbs on all Ministries/departments as revenue position improved.

“Spending on infrastructure is key to sustain recovery and to push growth. The government has been conscious of long-term investments. Even till July, capex has risen vis-a-vis last year but certainly we want projects under the National Infrastructure Pipeline to be given priority,” a government official said. The Finance Ministry has reviewed the capex progress and discussed plans to speed up infra spends in meetings with Ministries, the official said.

In the current fiscal year till July, for which the latest data is available with the Controller General of Accounts (CGA), government capital expenditure was at Rs 1,28,428 crore or 23.2 per cent of the 2021-22 Budget Estimates, lower than 27.1 per cent during the same period last year. For the full year, the Centre will be providing another Rs 2 lakh crore to states and autonomous bodies for their capital expenditure, as per Budget documents. “For 2021-22, I propose a sharp increase in capital expenditure and thus have provided Rs 5.54 lakh crores which is 34.5 per cent more than the BE of 2020-21. Of this, I have kept a sum of more than Rs 44,000 crore in the Budget head of the Department of Economic Affairs to be provided for projects/programmes/departments that show good progress on Capital Expenditure and are in need of further funds,” Finance Minister Nirmala Sitharaman had said while presenting the Budget.

With government revenues picking up, alongside the economic recovery, the Ministry on Friday removed expenditure curbs that were imposed on various Ministries for the July-September quarter. Restrictions imposed on bulk expenditure items of Rs 200 crore and above have also been removed for Budgeted capital expenditure for the remaining part of the year. As a cash management exercise, the government had asked various ministries and departments (in category B) to “restrict the overall expenditure within 20 per cent of BE 2020-21 in Quarter 2 (July to September, 2021)”.

“Among the big infra focussed departments, roads, railways, housing and urban affairs have done well in terms of capex outlay so far, while telecommunications and Jal Shakti, among others, have lagged. A collective focus is required for infrastructure creation across sectors,” the official said.

As against the annual capital expenditure estimate of Rs 1.08 lakh crore, Ministry of Road Transport and Highways has achieved capex of 45 per cent at Rs 48,403 crore in April-July. During the same period, Railways have spent Rs 28,381 crore or 26 per cent of BE of Rs 1.07 lakh crore.

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