The Centre will have to spend an estimated Rs 1.3 lakh crore each month in the last two months of the current financial year to meet its annual target of capital expenditure of Rs 10.18 lakh crore or it could fall short of the allocated target.
Official data indicates that the Centre has spent Rs 7.57 lakh crore between April 2024 and January end 2025 or 74.4% of the revised full year target for capital expenditure. The Centre’s capex in January was Rs 72,022 crore.
So far, this fiscal, the Centre has managed to spend an amount of over Rs 1.3 lakh crore in only one month of 2024-25 for capital expenditure. This was in December 2024 when the Centre’s capex was Rs 1.71 lakh crore.
Due to the model code of conduct in place for the General Elections and a long monsoon, the Centre had to scale down its budgeted capex target of Rs 11.1 lakh crore. The full Union Budget was presented in July and passed in August and since then infrastructure ministries have been asked to press the pedal on capital expenditure, which is seen to be a key for sustaining economic growth.
As per the data from the Comptroller and Auditor, key infrastructure ministries like railways, roads and power have seen a good pick up in capex but still have ways to go. While railways have spent 83% of the revised capex estimate of Rs 2.52 lakh crore, roads have 87% of the allocated target of Rs 2.72 lakh crore between April and January this fiscal. Power has spent 92% of the capex target for the fiscal.
Analysts believe that while the fiscal deficit target of 4.8% of the GDP will be met, the Centre will have to step up on capex if it wants to meet the target.
“Capex growth is still lagging targeted growth; it grew 5% year on year in the 10 months of the fiscal 2025. To achieve the revised target of FY25, the average capex in February and March must be Rs 1,305.35 billion, which has not been achieved since the monthly capex data is available. Gross tax revenue is lagging the FY25 (RE) target, however, slow capex growth provide cushion to fiscal deficit,” said a report by India Ratings and research, adding that it expects the government to achieve its FY25 fiscal deficit target.
Aditi Nayar, Chief Economist, Head - Research & Outreach, ICRA also noted that the Centre’s capex needs to expand by about 15% YoY in February-March 2025, on a high base, or record a monthly run rate of Rs 1.3 trillion, to meet the FY2025 RE. “A slight miss in capex relative to the target of Rs. 10.2 trillion for FY2025 can’t be entirely ruled out. Overall, ICRA expects the fiscal deficit to print in line with the FY2025 RE of Rs. 15.7 trillion or 4.8% of GDP,” she said.
Flash figures:
Meanwhile, with the fiscal year ending, the finance ministry is also closely monitoring the actual receipts and spending by line ministries in March. It has directed that flash figures of receipts and expenditures daily for the month of March 2025 must be shared with the Secretaries of the Departments of Expenditure and Economic Affairs.