Capital expenditure, which has been one of the pivots for the Central government to stoke growth in the economy amid the pandemic, has shown an upswing in the first half of FY22, compared with the same period in the previous fiscal. Capital expenditure during the April-September period of the current fiscal is also 22% more than the pre-pandemic period of H1, FY20.
In the Budget 2021-22, finance minister Nirmala Sitharaman increased the capital expenditure to ₹5.54 lakh crore – up 26% more than the revised estimate of ₹4.39 lakh crore for 2020-21.
Against the annual target of ₹5.54 lakh crore, the government has achieved capital expenditure to the tune of ₹2,29,351 crore, 41% of the budget estimate in the first half (April-September) of the current financial year. Capex progress in the first half is up 36% from ₹1,68,836 crore a year ago, according to data from the finance ministry.
The current fiscal’s capex progress till September 30 is up 22% from ₹1,87,537 crore in the pre-pandemic period of H1, FY20. As a percentage of the budgeted expenditure, capex in the first half of FY21 and FY20 stands at 41% and 55%, respectively.
According to finance ministry officials, capital expenditure will gather more momentum in the second half of FY22, and would have been higher in the first half itself had Covid 2.0 not led to localised lockdowns. “In May this year, capital expenditure was almost half the level achieved in May last year due to the second wave of the pandemic. We are confident that capex will pick up in the second half, which is the general trend,” the officials add.
It may be noted that out of the total expenditure of ₹2,29,351 crore incurred in H1, almost ₹1 lakh crore has been spent in the two months of August [₹43,440 crore] and September [₹57,483 crore] only.
The Ministry of Roads Transport and Highways, commerce, mines, and steel have led to the infra push, while heavy industries and ports and shipping have been the laggards. “The Ministry of Road Transport and Highways front-loaded a major portion of budgetary allocation made to it in the first quarter of the fiscal,” according to the officials quoted above. The Ministry of Road Transport and Highways received budgetary allocation worth ₹1,18,101 crore, out of which ₹1,08,230 crore was meant for capital expenditure. The railways ministry, too, received a record allocation of ₹1,07,300 crore in the Budget for the current financial year.
With private investments still a far cry, the government is doing the heavy lifting through capex push and centrally sponsored schemes. Earlier this week, finance minister Nirmala Sitharaman held a review of infrastructure spending by the Ministry of Civil Aviation and Ministry of Telecommunication. According to a release from the finance ministry, Sitharaman emphasised that there must be an accelerated phase of infrastructure development and ministries must continuously make concerted efforts to ensure that project implementation is fast-tracked.