- 06 Jun 2022
- ICICIdirect Research
Government aims to achieve 60% of FY23 capex target by September quarter
News: India aims to achieve 60% of FY23 capex target by September quarter i.e. about Rs 4.45 lakh crore. The Finance Ministry has asked key infrastructure ministries and departments to speed up projects, GoI wants to push capital expenditure to support the economy. The government has budgeted Rs 7.5 lakh crore capital expenditure in FY23, up from Rs 6.02 lakh crore in FY22. To achieve the target, infrastructure projects will be closely monitored to prevent any delays. Ministries and departments have been asked to provide detailed monthly plans and progress reports. In April FY23, the cumulative capital spending of all departments and ministries was Rs 78,925 crore, 67.5% more than the Rs47,126 crore spent in the same month a year earlier. The highways and railways account for about Rs 58,500 crore of the Rs 78,925 crore spent on the capital account in April. MORTH has a capital expenditure budget of Rs 1.18 lakh crore in the current fiscal year. It spent Rs 40,318 crore in April, almost 21% of the annual target. The Ministry of Railways spent Rs18,199 crore in April, which is 13% of its annual capital expenditure budget of Rs1.37 lakh crore.
Views: The government is driving capex on the fast lane and FY23 has started on a promising note. As it shows the government is continuing with the committed capex for FY23 and it will be good for long-term economic growth. However, private investments are yet to pick up pace. Average capacity utilisation, which has crossed the 70% mark, is expected to get a renewed boost with this and positive for overall capital goods sector. We may see healthy order-inflows for first-half of FY23.