Centre to focus on maintaining capex momentum

The Centre is keen on maintaining the pace of expenditure and will keep its foot on the capital expenditure pedal for the next few months ahead of the general elections. A significant cut in its spending bill for the fiscal is unlikely, sources said, amidst ongoing discussions with nodal ministries for the interim Budget. 

“The focus on capital expenditure will continue, at least until the end of January 2024 by when it is expected that about 80-85% of the Budgeted spending may be completed,” said a source close to the development. Capex has had the desired impact of ensuring a sustained economic recovery and the government is keen on maintaining the momentum amidst ongoing external uncertainty.  

This has also been indicated in discussions with nodal ministries as part of finalising the Revised Estimates for 2023-24 and the Budget Estimates for 2024-25. “There won’t be any reduction in the expenditure for this financial year. There is considerable fiscal space with the Centre to continue the pace of spending,” said the source.  

As such, the estimates for 2024-25, will also be roughly in sync with the spending pattern for this fiscal, the source further said, while pointing out that the Budget presented in February will be an Interim Budget and the full Budget 2024-25 will be presented post the general elections in May.   

The Centre has outlined total expenditure of Rs 45.03 lakh crore in the Budget Estimate 2023-24 of which the total capital expenditure is Rs 10 lakh crore. 

In the first six months of the fiscal, it has already utilised 49% of the targeted capital expenditure and gross tax revenue has remained in line at 49.8% of the full year target of Rs 23.3 lakh crore. While revenue from disinvestment proceeds may be lower than estimated, it is expected that it would be made up by the robust tax collections that are likely to exceed the Budget estimate as well as higher than anticipated dividend from the Reserve Bank of India. 

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