SLUGGISH CAPEX BARES THE CHINKS IN ECONOMIC ARMOUR

FOR an economy already bogged down by a consumption slowdown and a shrinking middle class, the moderation in public and private capital expenditure comes off as a new headache.

There were expectations that a surge in government capex in the previous financial year would help crowd in private investment in the current year.

However, things have not gone as per the script; a recent RBI report confirms the fears that the slack in private investment continues. What has made the situation worse is the slowing capex by government departments as well as central public sector enterprises. In the first six months of the current financial year, central government capex has shrunk 15 percent while CPSE capex has come down by 11 percent.