The capital expenditure in critical sectors such as telecom, railways, and highways has slowed down significantly, raising concerns about the impact on economic growth. According to data from the controller general of accounts, the telecom department, as well as the ministries of defence, railways, and highways, have all seen a decrease in their spending during the fiscal year up to November.
Telecom Department Lagging Behind
The Department of Telecommunications (DoT) has only spent 6% of its annual allocation of Rs 84,496 crore, amounting to Rs 5,424 crore. The bulk of this spending is earmarked for supporting public sector undertakings, which have not received their funds due to delays linked to milestones and specific requirements.
Economic Affairs Department Facing Challenges
Similarly, the Department of Economic Affairs has utilized only 4% of its Rs 66,197 crore allocation, totaling Rs 2,948 crore. Most of this expenditure is categorized under “other central sector expenditure” and will be disbursed as needed throughout the year.
Impact on Economic Growth
The slowdown in government capital expenditure is being cited as a contributing factor to the deceleration in economic growth. The Centre’s capital expenditure during April-November was estimated at 49% of the allocated Rs 11,11,111 crore for the year, compared to 59% during the same period last year, resulting in a significant difference of Rs 72,195 crore.
Major Spenders Affected
Among the major spenders, the defence ministry has only utilized 41% of its Rs 1.7 lakh crore allocation, down from 53% last year. The highways ministry has also seen a decrease in spending, utilizing 54% of its Rs 2,72,241 crore capex allocation compared to 68% during the previous year. This decline is primarily attributed to fewer project awards, a concern that was highlighted by Prime Minister Narendra Modi. Additionally, the railways sector has spent 67% of its allocated funds, down from 71% in the previous year.
As the government grapples with lower capital expenditure in key sectors, the impact on infrastructure development and overall economic growth remains a pressing concern. The reasons behind this slowdown, including delays in fund disbursement and project implementation, will need to be addressed to ensure sustainable growth and development in the future.