Modi govt's capital expenditure for April-July crosses Rs 1 trillion

The Narendra Modi government is augmenting its public investment spree in the run-up to 2019 Lok Sabha elections. Capital expenditure for the April-July period has been pegged around Rs 1.11 trillion, or 37 per cent of the full-year budgeted estimate of Rs 3 trillion.

The major beneficiaries have been the ministries of roads and highways, railways and power, senior officials said. This is the first time that capital spending has crossed Rs 1 trillion for the first four months of any fiscal year. For the same period in 2017-18, capital expenditure was Rs 950 billion

Revenue expenditure for April-July was around Rs 7.71 trillion, or 36 per cent of the full year budgeted estimates of Rs 21.42 trillion. This compares with Rs 7.13 trillion for the same period last year, which was nearly 39 per cent of last year’s target.

Revenue expenditure, as a percentage of full year target, has been lower year-over-year primarily due to lower subsidy payments carried over from 2017-18, an official said.

Sources said that for the April-July period, the road ministry has spent nearly 47 per cent of its entire yearly capex budgetary support of Rs 594 billion, while railways and power have spent 35 per cent each of their capex allocation of Rs 531 billion and Rs 22 billion respectively.

The fiscal deficit data for April-July, including revenue and expenditure trends, will be officially released on August 31.

Finance Minister Arun Jaitley in his budget speech had announced an allocation of Rs 5.97 trillion for 2018-19 for infrastructure spending, including through extra-budgetary means, up by over Rs 1 trillion from a year ago.

The Ministry of Roadways’ biggest project this year will be Bharatmala, under which national highways exceeding 9,000 km will be completed in 2018-19. Under the phase-I of the project, 35,000 km of highways would be constructed at an estimated cost of Rs 5.35 trillion.

The project would be funded through various sources, including Rs 2.09 trillion from the market, Rs 1.06 trillion through private investment and Rs 2.19 trillion from the central road fund or toll collection.

The fiscal deficit target for 2018-19 has been pegged by Jaitley at Rs 6.24 trillion, or 3.3 per cent of gross domestic product, in a year where there are concerns regarding Goods and Service Tax, after adjusting for states’ compensation and SGST, and other sources of revenue including disinvestment and non-tax revenue.