Budget 2024: Centre may increase FY25 capex target for CPSEs by 12-13%

The government aims to propel economic growth with a higher capital expenditure target for central public sector enterprises (CPSEs) in the upcoming financial year

The Centre may raise the capital expenditure (capex) target for central public sector enterprises (CPSEs) in the financial year 2024-25 (FY25) by 12-13 per cent to help drive economic growth, according to a report by The Economic Times (ET).

In absolute terms, the capital expenditure projection for 54 CPSEs and five departmental arms, including the Railway Board and National Highways Authority of India, is anticipated to be around Rs 8.20-8.30 trillion for FY25. This marks an increase from the FY24 target of Rs 7.33 trillion, which was itself a 13.4 per cent rise over the revised FY23 target of Rs 6.46 trillion.

As of December 31, CPSEs had spent Rs 5.51 trillion, reaching 75.1 per cent of the combined capital expenditure target for FY24. This figure is 22 per cent higher compared to the same period the previous year.

READ: Interim Budget 2024-25: Govt may target 5.3% fiscal deficit for FY25

As earlier reported by Business Standard, the government is expected to continue its focus on increasing capital expenditure, particularly in the infrastructure sector, in the upcoming Budget 2024.

Last year, in Budget 2023, the government allocated a record high of Rs 10 trillion towards capex. The surge in capex allocation was propelled by the Centre's aim to ramp up cycle of investment, as well as to drive job creation. This was also in line with the government focus on the "Four I's" - Infrastructure, investment, innovation, and inclusion - over the next 25 years.

ALSO READ: Budget 2024: Govt may hike housing subsidy ahead of Lok Sabha polls

This marked a notable increase from Rs 4.39 trillion in 2020-21, which further rose by 35 per cent to Rs 5.54 trillion in 2021-22. The trend continued with a 35 per cent hike in capex in 2022-23 to Rs 7.5 trillion, reaching a peak of Rs 10 trillion, a growth of 37.4 per cent.