Govt’s April-July capital spending crosses ~1 trn

Highest in first four months of a fiscal year; roads, power major beneficiaries

The Narendra Modi government is augmenting its public investment spree in the run-up to the 2019 Lok Sabha elections. Capital expenditure for the April-July period has been pegged around ~1.11 trillion, or 37 per cent of the full-year Budgeted Estimate of ~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 ~1 trillion for the first four months of any fiscal year. For the same period in 2017-18, capital expenditure (capex) was ~950 billion.

Revenue expenditure for April-July was around ~7.71 trillion, or 36 per cent of the full year budgeted estimates of ~21.42 trillion. This compares with ~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-overyear 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 ~594 billion, while railways and power have spent 35 per cent each of their capex allocation of ~531 billion and ~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 ~5.97 trillion for 2018-19 for infrastructure spending, including through extra-budgetary means, up by over ~1 trillion from a year ago.

The roadways ministry’s biggest project this year will be Bharatmala, under which national highways exceeding 9,000 km will be completed in 2018-19. Under phase-I, 35,000 km would be constructed at an estimated cost of ~5.35 trillion. It would be funded through various sources, including ~2.09 trillion from the market, ~1.06 trillion through private investment and ~2.19 trillion from the central road fund or toll collection.

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