NEW DELHI: Central government’s infrastructure spending has seen a sharp jump in the first quarter of the current fiscal as capital expenditure during the quarter reached Rs 1.75 lakh crore, a 57% jump over the previous year.
In the same quarter last year, the Capex incurred by the government stood at Rs 1.11 lakh crore. For the current fiscal ending March 31, 2023, the government has earmarked Rs 7.5 lakh crore for Capex, 27% more than last fiscal.
“Ind-Ra believes that the sustained double-digit growth in Capex will help the economy at a time when the private investment is in wait-and-watch mode due to the monetary tightening across the globe and the uncertainty created by the Russia-Ukraine conflict,” said Dr Sunil Kumar Sinha, Principal Economist, India Ratings and Research.
“For a strong and durable economic recovery, it is pertinent the government sustains its Capex in the remaining months of FY23. This is an expected nudge the states (which account for over three-fifths of the general government Capex) as well to chip in and front load their capex targets for FY23,” Sinha further stated.
Compared to the sharp jump in capex, revenue expenditure during the quarter saw a moderate 8.5% rise. Net tax collection during the quarter grew 23% to Rs 5.06 lakh crore compared to Rs 4.12 lakh crore.
Meanwhile, the fiscal deficit in the first quarter breached Rs 3.5 lakh crore, 21.2% of the full-year target. In the previous year during the same quarter, the fiscal deficit was at Rs 2.74 lakh crore.
The Centre has set a target for fiscal deficit at Rs 16.6 lakh crore or 6.4% of the gross domestic product (GDP) for the current fiscal. It was at 6.7% in the last fiscal.
As per the Controller General of Accounts (CGA) data, in the April-June quarter, the Centre’s total expenditure stood at Rs 9.48 lakh crore, 24% of the budgeted estimates ( BE) for FY23. If compared with last year, it was at 23.6% in the year-ago period.