What Next After Capex Front-loading?

Despite Centre's capital expenditure cycle gaining momentum, gross fixed capital formation-a proxy for investment-lags. It needs attention.

-  ASHUTOSH KUMAR

Morning shows the day, goes an old saying. Centre’s decision to front-load infrastructure spending has set the pace for economic growth in the latter part of the year. Finance ministry data shows ₹2.78 lakh crore capital expenditure in first quarter of FY24, up 59% from Q1 of FY23, out of the annual Budget allocation of ₹10 lakh crore. This is 27.8% of Budget estimate compared with 23.4% in same period of FY23 and four times the ₹63,000 crore spent in pre-Covid Q1 FY20.

The numbers were ₹88,273 crore in Q1 of FY21 and ₹1.11 lakh crore in Q1 of FY22.

Centre has been enhancing allocation to public infrastructure and front-loading capital expenditure as part of Covid macroeconomic management for pushing economic growth at a time when other engines of the economy—private capital expenditure, exports and private consumption—are performing below par.