States’ capex rises by 11.9% in April-February FY23 due to higher revenue

The thrust given to capital expenditure (capex) by the Centre had encouraged the States to increase their capex, the Union Finance Ministry said on Tuesday. 

Quoting data from the Controller General of Accounts (CGA), the ministry said that capital expenditure by States during April-February 2023 was 11.9 per cent higher compared to that of the previous year. The States have spent around 54.7 per cent of their budgeted capital expenditure during this period in line with past trends.

Besides, the 24 major States, which have presented their Budgets as of March 23, have cumulatively announced a 17.7 per cent increase in capital expenditure in FY24 compared to that of the previous year’s Budget estimates, the ministry has noted.

This increase (in States’ capex) is attributable to strong revenue generation and support provided by the Centre in terms of advance release of payment to States,” the ministry has claimed. 

The Centre’s own capital expenditure during April-February 2023 was 21.7 per cent higher compared to that of the corresponding period of the previous year. “This has led to an improvement in spending quality, which is reflected in the declining revenue expenditure to capital outlay ratio over the past years. The momentum in Central government’s capital expenditure is envisaged to continue in FY24 to sustain economic growth when the global economy is adversely affected by monetary policy tightening, rising inflation and supply chain disruption,” the ministry has said in its monthly economic review. 

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