Capex contracted, revexgained pace in Oct: CGA data

Persistent contraction in central government's capex for the third month in a row in October even while revenue expenditure picked up pace during the month may limit the support of government expenditure to a sluggish economy in the December quarter, unless the trend reverses.

- RUCHIKA CHITRAVANSHI

According to the data released by the Controller General of Accounts (CGA) on Friday, capex in October contracted 8.4 per cent while revenue expenditure, excluding interest payments, rose 41.9 per cent during the month.

During April-October period, capex contracted 14.7 per cent while revenue expenditure grew 8.6 per cent, leading to the total expenditure expanding 3.3 per cent.

Nominal GDP growth in the second quarter and the first half of FY25 amounts to only 8 per cent and 8.9 per cent respectively. "If this trend persists, even the growth of the government's gross tax revenue may be adversely affected," DK Srivastava, chief policy advisor, EY India said.