Subdued revenue spend may hit economic recovery, say economists

Experts say reduction in revenue expenditure may not result in capex rise

The Centre’s capital expenditure saw a robust double-digit growth in the first quarter of financial year 2021-22 (Q1FY22) year-on-year, but the decline in revenue expenditure may drag economic recovery, economists warn.
 
Revenue expenditure, which plays a key role in propelling demand in the economy, saw a 2.4 per cent decline in Q1, led by a sharp reduction in rural expenditure. Besides, the cut in revenue spending may not be diverted to capex, experts pointed out.
 
After posting a 35.6 per cent contraction YoY in April, the Centre’s revenue expenditure expanded by 32.4 per cent in May and 8.9