States spent 39% of budgeted capex in Apr-Nov as against 60% by Centre: Report
1 min read . Updated: 28 Jan 2023, 04:16 PM IST
Premium- Five major states -- Uttar Pradesh, Madhya Pradesh, Karnataka, and Tamil Nadu alone contribute to 47% of the total capex
New Delhi: The Centre has spent 60% of the budgeted capital expenditure in the first eight months of the current fiscal, while states are lagging with just 39% of the capex target achieved during the same period, according to a study by Bank of Baroda.
This comes amid expectation of a higher budgetary allocation for the capex in the upcoming Union Budget 2023-24 to boost investment
According to the study, of the ₹6.85 trillion allocation, five major states alone contribute to 47% of the total capex. These are Uttar Pradesh ( ₹1.2 trillion), Maharashtra ( ₹65,000 crore), Madhya Pradesh ( ₹46,000 crore), Karnataka ( ₹44,000 crore), and Tamil Nadu ( ₹43,000 crore).
If one added other major states, which have share of more than 4% such as Odisha, Gujarat, Rajasthan, West Bengal, Andhra Pradesh, Bihar, and Telangana-- the 12 states contribute about 81% of the capital spending.
"At a time when we are looking at the central government to give public investment a nudge, performance of state governments should also be keenly watched. While some states like Gujarat, Karnataka, Tamil Nadu, and Madhya Pradesh are closer to meeting their budgetary targets for FY23, some other states like Uttar Pradesh and Maharashtra, are still far behind, dragging the overall capex spent to only 39% of the budgeted amount," said the study.
The Budget last year allocated ₹7.5 trillion for capex in the current fiscal, which included a 50-year interest-free loan for states towards capital spending.
The Centre for the first eight months of the year spent ₹4.5 trillion, which is 60% of the budgeted amount and states ₹2.7 trillion, which is 39% of the budget target.
"Hence, there is considerable slack here which needs to be made up during the course of the remaining four months of the year. If that is not the case, then we can expect downward revision in the capex print when revised estimates (RE) for FY23 are published. Thus, tracking the performance of these states can help us estimate if target for this year will be met or not," said the study.
