Despite an improvement in capex by the central public sector enterprises (CPSEs), aggregate capex by public sector entities including NHAI and the Railways declined 8% on year in April-October of the current financial year.
The slower pace of investment by railways and the National Highways Authority of India continued to weigh in these undertakings’ aggregate performance.
The CPSEs and other agencies with annual capex targets of Rs 100 crore and above have set a combined target of investing Rs 7.8 lakh crore for FY25. These agencies invested Rs 3.93 lakh crore in April-October of FY25, down 8% compared with Rs 4.28 lakh crore in the year-ago period.
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Given the slower pace of public capex, Finance Minister Nirmala Sitharaman recently held review meetings with key ministries including railways and roads to accelerate capex.
Railways and NHAI’s investments are largely funded through the budget. Both entities accounted for 55% of the CPSEs’ capex target for FY25.
In April-October 2024, Railways Board capex fell by over 15% to Rs 1.33 lakh crore while NHAI investments fell by 7% to Rs 95,007 crore.
The slowdown in public capex—Centre, states and CPSEs- so far in the current financial year has been largely due to the impact of the general election and extended rains.
However, CPSEs (excluding Railways and NHAI) have accelerated their capex pace to cover the gap of the initial months.
Fuel retailer-cum-refiner Indian Oil Corporation, which is investing heavily in expanding refining capacity and energy transition, achieved a capex of Rs 23,704 crore in the first seven months of FY25, up 4% on the year.
NTPC, which is expanding capacity across many of its pants and foraying into cleaner energy, investments rose 77% on year 18,957 crore in April-October 2024.
The country’s top state-run explorer Oil and Natural Gas Corporation’s investment rose 16% on year to Rs 20,653 crore in April-October 2024.
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States’ capital expenditures likely fell by nearly 9% year over year in the first six months of the current financial year even as their revenue spending rose at a faster pace during the period.
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