CPSE capex at Rs 2.85 trn in first half | The Financial Express

CPSE capex at Rs 2.85 trn in first half

The capex target for these entities – 54 CPSEs and 5 departmental arms ― with an annual capex of above Rs 100 crore is set at Rs 6.62 trillion for FY23.

CPSE capex at Rs 2.85 trn in first half
The railways and NHAI with substantial budgetary support are the two largest public-sector investors, which play a key catalytic role in crowding in capex from assorted other entities.

The Central Public Sector Enterprises (CPSEs) and other large government undertakings, including the Railways and the National Highways Authority of India (NHAI), achieved 43% of their combined annual capital expenditure target in April-September of the current financial year, by spending Rs 2.85 trillion, sources said.

The capex target for these entities – 54 CPSEs and 5 departmental arms ― with an annual capex of above Rs 100 crore is set at Rs 6.62 trillion for FY23.

The railways and NHAI with substantial budgetary support are the two largest public-sector investors, which play a key catalytic role in crowding in capex from assorted other entities. These two entities have reported impressive capex growth rates in the first half of FY23, an official said.

“The capex target of Rs 6.62 trilion for CPSEs and departmental arms in FY23 will be achieved,” the official said.

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The Centre’s budgetary capex has reached Rs 3.43 trillion or 45.7% of the annual target in H1FY23 compared with Rs 2.3 trillion or 41.4% of the respective target in the year-ago period. In H1FY23, budget capex has been led by investment in roads and highways, which rose 65% on-year to Rs 1.22 trillion. Investment in railways projects rose 91% on year to Rs 88,548 crore in during the period.

Given that the first half is usually weak for the delays in the release of funds, this is a remarkable feat and signals accelerated momentum in public capex.

Gross fixed capital formation in the June quarter jumped 20.1% from a year before, against 5.1% in the previous quarter, driven substantially by the public sector, especially the Centre’s budgetary capex.

Fuel retailer-cum-refiner Indian Oil Corporation (IOC) achieved capex of Rs 13,640 crore or 48% of its annual target of Rs 28,549 crore in H1FY23 compared with 41% of the annual target achieved in the corresponding period of last fiscal. IOC is expanding the refining capacity of its plants at several locations in the country.

ONGC, the top CPSE player in oil and gas exploration, has achieved a capex of Rs 11,756 crore in the first six months of the current financial year or 39% of the annual target.

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Among others, fuel retailer-cum-refiner BPCL’s capex was Rs 6,715 crore or 67% of the FY23 target of Rs 10,000 crore.

The combined capital expenditures by 40 of these entities with annual capex budgets of above Rs 500 crore stood at Rs 2.19 trillion, 37% of the respective annual target in the first half of FY22.

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First published on: 03-11-2022 at 01:00 IST