FM reviews capex, asks DoT to expedite digital expansion

By: |
October 26, 2021 3:30 AM

Sitharaman reviewed the progress of the Centre’s budgetary capex, implementation of infrastructure projects and asset monetisation plans in a meeting with the ministry of civil aviation and the department of telecommunications, the finance ministry tweeted.

The purpose of this meeting is to use this juncture not only to push growth from the Centre but also at the states level.The purpose of this meeting is to use this juncture not only to push growth from the Centre but also at the states level.

Finance minister Nirmala Sitharaman on Monday nudged the department of telecom to expedite digital expansion plans in the north-eastern region and asked the ministry of civil aviation to raise its capital spending target substantially in the next fiscal.

Sitharaman reviewed the progress of the Centre’s budgetary capex, implementation of infrastructure projects and asset monetisation plans in a meeting with the ministry of civil aviation and the department of telecommunications, the finance ministry tweeted.

Importantly, the capex of the telecom department hit just 2% of its FY22 budgetary outlay of `25,934 crore until August. However, the civil aviation ministry has witnessed massive capex this year; against the budgetary allocation of only `41 crore, it has spent `1,884 crore until August. Sitharaman asked the civil aviation ministry “to ensure that more projects are grounded and capex spending in FY23 is substantially higher than the present estimated target”, according to one of the tweets. Both the DoT and the civil aviation ministry saw a change of guard after the Cabinet shuffle in July.

The Budget for FY22 raised the capex target by 30% from a year before, as the government pushed for public capex to reverse a Covid-induced slump in economic growth. The finance ministry has already asked various infrastructure ministries and departments to step up capex and create durable assets.

Since the presentation of the Budget, such expenditure via budget dropped in March, May and July from a year earlier. While the Centre’s capex still rose 28% until August, it was driven substantially by a conducive base. More importantly, for the budgeted goal of `5.54 lakh crore to be realised, the Centre now needs to raise capex sharply in the remaining months of this fiscal, that, too, on an unfavourable base (especially between October 2021 and February 2022). Until August, capex made up for 31% of the full-year target, against 32.6% a year earlier when a pan-India lockdown was in force for much of the first four months.

Chief economic adviser KV Subramanian had earlier said capex had a high multiplier of 4.5, against less than 1 in even well-directed revenue spending.

Do you know What is India expected to grow 10 pc during current fiscal: NCAER Director General Poonam Gupt,FinMin releases Rs 9,871 cr grant to 17 state, Cash Reserve Ratio (CRR), Finance Bill, Fiscal Policy in India? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Rising fuel prices- Small is big: How the ‘Chhotu’ LPG cylinder became a bestseller
2WTO defers ministers’ meet
3Govt plans further cut in compliance burden: Piyush Goyal