India's finance minister Nirmala Sitharaman is set to go for a fresh push for capital expenditure, especially for sectors such as railways and roads, in her fifth Budget, as she seeks to ensure that global headwinds don’t take a toll on the Indian economy.
While the private sector was anticipated to step up and invest in building new infrastructure, the conflict in the Ukraine and rising borrowing rates to combat inflation in some regions of the world have forced various industries to postpone this capex.
As a result, economists as well as industry bodies have made a case for retaining the focus on public spending by the Centre to generate demand for key inputs, such as cement and steel, and in the process create demand.
The Modi administration has increased capital expenditures since the Covid-19 outbreak in 2020, and all central government ministries and divisions are prepared to employ the increased funding.
According to the most recent data made public by the Controller General of Accounts, departments like road transportation, highways, and railroads have used about 80% of their annual budget. For instance, the ministry of road transport and highways spent about £15 billion of its capex budget between April and November, which is 80% of the allotted amount for 2022–23.
