Spending lag, capacity issues behind govt's capital expenditure push

To address the lag in government spending caused by the election season and to gain a realistic estimate of capacity issues, the finance ministry has relaxed capital expenditure norms and initiated review meetings, according to two government officials.

This comes after a dip in government consumption expenditure proved to be a drag on Gross Domestic Product (GDP) growth.

The growth slowed to a five-quarter low of 6.7 per cent year-on-year (Y-o-Y) in the April-June quarter.

On September 2, the finance ministry relaxed the rules for big releases above Rs 500 crore for all items of expenditure in