Govt capex engines to fire on all cylinders in year of polls

India's public capital expenditure (capex) blitz will continue at full throttle even as some departments look poised to exhaust their budgets, two persons aware of the plan said.

- Rhik Kundu & Subhash Narayan

The government intends to achieve this by reducing unproductive expenditure and rerouting money lying unspent in some departments.

The government also believes it will be able to meet its record capex targets as well as the fiscal deficit target in an election year, encouraged by record tax collections for the year so far.

The finance ministry has asked all government departments and ministries to submit budget and expenditure trends before December end so that it can reassess their fund requirements and divert expenditure if required to flagship schemes such as the rural job guarantee scheme and schemes for small and medium enterprises, the people cited above said on condition of anonymity.

The government has raised its capex budget in recent years to refresh infrastructure, create jobs and quicken growth. It budgeted 10 trillion for capex in FY24, a 37% rise from last fiscal. In FY23 and FY22, capex budgets were increased by 24% and 40%, respectively.

However, infrastructure ministries including roads and railways have already used up more than 60% of their allocated capital, and are on course to finish the rest by January.