NEW DELHI: The central public sector enterprises (CPSEs) and large government agencies present in the infrastructure sector like the NHAI and the Railways have invested Rs 4.28 trillion or 58.4% of their combined annual capital expenditure target in April-October of the current financial year, supporting the public capex-led economic growth revival.
On an annual basis, these entities’ capex grew by 22% on year in the first seven months of the current financial year compared with Rs 3.51 trillion in the year-ago period.
Investment demand grew by 11% in the September quarter compared with 8% growth in the first quarter of FY24. The investment rate (GFCF as % of GDP) also inched higher to 35.3% compared with 34.2% a year ago. This was supported by higher capital expenditure at both the Central and state government levels as well as state-run entities/agencies. As aginst the target of Rs 10 trillion, the Centre’s capex has reached 54.7% in April-October of FY24.
Capital expenditure by state governments surged by 56% on year in the first half of the current financial year compared with just a 2% rise in the year-ago period, supported by capex loans from the Centre.
The capex target for the CPSEs and other agencies was set at Rs 7.33 trillion for FY24.
Railways and NHAI with substantial budgetary support as well as petroleum CPSEs are the largest public-sector investors that play a key catalytic role in crowding capex from other entities.
In April-October 2023, budgetary investment in railways projects rose 54% on year to Rs 1.57 trillion.
Fuel retailer-cum-refiner Indian Oil Corporation (IOC) achieved capex of Rs 20,180 crore or 66% of its annual target of Rs 30,395 crore in April-October of FY24 compared with 58% of the annual target achieved in the corresponding period of last fiscal. IOC is expanding its refining capacity and investing in hydrogen plants at several locations in the country.
ONGC, the top CPSE player in oil and gas exploration, has achieved a capex of Rs 17,714 crore in the first seven months of the current financial year or 60% of the annual target.
Source: The Financial Express
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