April sees capex boost of 48%

The Cent re’ s capital expenditure in April 2018 saw a jump of 48 percent from the same month last year, as a consequence of a second consecutive year of an advanced Budget. AR UP ROY CHOU DH UR Y reports

The Centre’s capital expenditure (capex) in April 2018 saw a jump of 48 per cent, compared with the same month last year, the consequence of a second consecutive year of an advanced Budget. The biggest gainers as a result of this capex boost were the Ministries of Defence, Railways, and Road Transport.

Business Standard has learnt from senior government sources that capex for the first month of 2018-19 was around ~430 billion, compared with nearly ~290 billion in April 2017. Overall expenditure, however, dropped from ~2.42 trillion to ~2.31 trillion.

“Last April, there were higher arrears from 2016-17 which were carried over. There were more pending payments made for fertiliser and food subsidies, compared to April 2018,” said a senior official. Excluding that, our emphasis on front-loading of expenditure has continued,” the person said.

Lower carryovers led to a reduced revenue expenditure outlay for the central government. For April, it was around ~1.87 trillion, around ~260 billion or 14 per cent lower than ~2.13 trillion in April 2017. The official expenditure, revenue, and fiscal deficit data for April 2018 will be released on May 31. The capex outlay for the defence ministry jumped a staggering 127 per cent to~148billion, from~65billionfor the same period last year, sources said. Railways saw a capex increase of ~20 billion, while the Ministry of Road Transport and Highways was allocated ~70 billion in capital spending, compared to April last year.

The Union Budget 2017-18 was the first Budget to be advanced to February 1, from February 28. This allowed the passage of the Finance Bill before April 1, and hence led to higher disbursements by the central government, unlike previous years, when a vote-on-account was used to keep the government running in April-June quarter, and the Finance Bill used to be passed in May.

Budget 2017-18 was marked by two more important changes. The Rail and UnionBudgets were merged and Plan and non-Plan classifications of expenditure were abolished and replaced by revenue expenditure and capex classifications. These changes continued in the 2018-19 Budget.