The Centre will exceed the budgetary capital expenditure target of Rs 7.5 trillion for FY23 even as it will curb revenue spending to the extent possible to remain within the fiscal deficit goal of 6.4% of GDP. The stance of the government is important given the tepid recovery of private investments.
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The momentum in the capex cycle will continue despite macro headwinds and concerns that the government may curtail capex because of the same. Segment like roads railways and defence are driving the spend from the government side. Overall, the above augurs well for business opportunity for capital goods companies.
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