Capital expenditure by the central public sector enterprises including departmental agencies (CPSEs) fell by 16% in aggregate in April-July, indicating that public capex is yet to recover from impact of general elections on project implementations.
The decline in the CPSEs’ capex is more prominent for the top two investors –Railways Board and the National Highways Authority of India (NHAI), where state-run companies have improved upon last year’s performance.
In the first four months of the current financial year, railway’s capex fell by 25% to Rs 71,976 crore while NHAI investments declined by 8% to Rs 58,067 crore.
Despite the Centre’s policy of public capex-led economic growth revival in recent years, the pace of capex this financial year will only pick up from the second half of the year. The investments by CPSEs were severely affected in April-May due to general elections.
Railways and NHAI’s investments are largely funded through budget. Together, these entities accounted for 55% of the CPSEs’ capex target for FY25. The CPSEs, having annual capex target of Rs 100 crore and above have set a combined target of investing Rs 7.8 trillion in FY25.
After railways and NHAI, petroleum sector undertakings in aggregate are the third biggest public sector investors in the CPSEs. Fuel retailer-cum-refiner Indian Oil Corporation achieved a capex of Rs 12,267 crore in the first four months of FY25, marginally lower than Rs 12,350 crore in the corresponding period a year ago.
ONGC, the top state-run player in oil and gas exploration, invested Rs 11,717 crore in April-July 2024, up 13% on year. NTPC, which is expanding capacity across many of its pants and foraying into cleaner energy, has doubled investment to Rs 9,772 crore in April-July 2024 from the year ago period.
In Q1FY25, the Centre’s capex declined by 35% annually to Rs 1.81 trillion compared with Rs 2.78 trillion in the year-ago period. States’ capital expenditure likely fell by 22% on-year in the first quarter of the current financial year, reflecting the decline across the public capex spectrum, largely due to general elections and slower disbursement of capex loans to states.
From: financialexpress
Financial News
