Govt Capex Hits Low In Dec Quarter, Raises Concerns For Infra Development
Recent data from the Centre for Monitoring Indian Economy (CMIE) has raised alarms as government announcements for new infrastructure projects, including roads, railways, and other capital expenditure initiatives, hit an all-time low in the December quarter.
The total expenditure for the quarter plummeted to Rs 26,987 crore, marking the lowest figure since March 2009, according to media reports citing CMIE data.
The preceding quarter had recorded Rs 70,081 crore, which was close to the record low of Rs 62,369 crore in December 2020 during the early months of the COVID-19 pandemic.
The data reveals an alarming 81 per cent year-on-year decline in new government projects for December 2023.
In parallel, private projects also experienced a substantial setback, witnessing a 77 per cent year-on-year decline to Rs 1.9 trillion in December, as reported citing the latest available data.
The report highlights that only Rs 1.2 trillion worth of projects were completed during the December quarter, notably lower than the average quarterly completions of Rs 1.7 trillion in 2023.
Analysts express concerns over the near-term outlook, attributing the potential patchiness to the impending 2024 election season, which may cause delays in new project approvals.
The downturn in government and private investments in infrastructure projects raises questions about the pace of economic recovery and the government's commitment to fostering growth through capital expenditure.
The data underscores the need for swift and effective measures to revive the infrastructure sector, which plays a crucial role in driving overall economic development. As stakeholders closely monitor these developments, the focus remains on government initiatives and policies that can stimulate investment and accelerate the pace of infrastructure development in the country.
