The great infra push! 50% jump in H1 capex

The government has come out with all guns blazing on the capital expenditure front in the first half of the current financial year. The total central capital expenditure in H1 FY23 has witnessed a 50% jump to ₹3,42,889 crore, compared with ₹2,29,351 crore in the same period of the previous financial year.

The capex utilisation as a percentage of the budget estimate of ₹7,50,246 crore in the first half of the current fiscal stands at 46% compared with 41% in the corresponding period of the previous financial year.

The amount spent by the government during April-September period this year is almost double in comparison with the infrastructure spending done in the pre-pandemic years of 2019-20 and 2018-19. During the first half of 2019-20 and 2018-19, the government spent ₹1,87,537 crore and ₹1,62,629 crore, respectively.

The capital expenditure by the government has exhibited a “strong growth” to date in the current financial year, according to DK Srivastava, chief policy adviser, EY India. In the Economy Watch for October, Srivastava pointed out, “Government’s total expenditure grew by 8.9% during April-August FY23 as compared to 2.3% during the corresponding period of FY22. Revenue expenditure grew by 3% during April-August FY23 as compared to a contraction of (-) 0.8% during April-August FY22. Capital expenditures showed a strong growth of 46.8% during April-August FY23, significantly higher than the corresponding growth rates in recent years.”

Record spending of ₹90,561 crore was achieved in September alone, up 57% from ₹57,483 crore spent in September last year. This was followed by ₹78,925 crore in April, up from ₹47,126 crore in the same month of the previous fiscal.

The ministries that have exhibited good performance on the utilisation of allocation towards infrastructure are ministry highways, railways, jal shakti and telecom, while housing is the one that has to catch up with the pace of the performing ministries.

Both railways and highways ministries have utilised 65% of the capital outlay for the current financial year in the first six months itself.

The total budgetary allocation to the railway ministry for infrastructure spending in the year stands at ₹1,37,100 crore. The railway ministry has spent ₹88,548.29 crore, almost double than ₹46,261.85 crore spent in the corresponding period of the previous financial year.

The highways ministry, meanwhile, has deployed an amount of ₹1,21,893 crore on infrastructure in April-September out of the total allocation of ₹1,87,744 crore for the current financial year.

The telecom ministry, in fact, has scripted a comeback story with actual spending in the first half of the fiscal growing multi-fold. The ministry has spent ₹25,593 crore in the first half of the fiscal compared with ₹3,155.04 crore in H1, FY22. Fund utilisation by the jal shakti ministry, too, has gone up to ₹23,774.13 crore compared with ₹17,000 crore. The fund utilisation by the ministry of housing and urban affairs has come down to ₹9,120.59 crore in the first half this year, compared with ₹13,429 crore in the comparable period of the previous fiscal.