Govt's FY25 capex may miss target by up to 9%

WITH THE SPENDING capacity of government departments and agencies already overstretched, the Centre's capital expenditure will likely fall short of the annual target of ₹11.11 lakh crore by up to ₹60,000 crore-₹1 lakh crore, sources told FE.

- PRASANTA SAHU

After the gross domestic product (GDP) growth came in at 5.4% in the July-September period year-on-year, the lowest in seven quarters, the government is concerned about the annual capex decline trend across the public sector space - Centre, states and central agencies.

WHILE THE GOVERNMENT has been nudging its departments/agencies to further accelerate the pace of investments, officials said that there could still be a shortfall of up to 9% 60,000 crore-1 lakh crore as they could not recoup time lost due to the general elections in Q1FY25 and extended rains in Q2.

The investment shortfall would be across several central government ministries as well as in capex loans to states. However, the railways and the National Highways Authority of India (NHAI), despite trailing the previous years' achievements so far, could scrape through to meet the capex outlay for them. Together, these two agencies account for ₹4.28 lakh crore or about 39% of the Centre's capex budget for FY25.