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Updated January 28th, 2024 at 16:56 IST

Expenditure grew 9% in April-Nov 2023, led by healthy capex

The increase is led by the Centre’s focus on capex, which is up 31 per cent YoY and has reached 59 per cent of the budget estimate.

Business Desk
Money currency
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Expenditure growth: In the first eight months of the ongoing fiscal, the expenditure is tracking 59 per cent of BE, higher than the 58 per cent during the same period in the prior year. According to the report by Emkay, total expenditure has grown 9 per cent FYTD24 vs 8 per cent growth in the budget estimate. The increase is led by the Centre’s focus on capex, which is up 31 per cent YoY and has reached 59 per cent of BE. 

Revenue Expenditure

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Revenue expenditure growth has been more muted, at 4 per cent YoY vs. the 1 per cent budgeted growth, largely due to higher spending on education even as subsidy payments are 19 per cent lower so far. 

“The continued prioritization of capex has led to an improvement in the quality of expenditure, with the share of capex in total expenditure at 22 per cent (vs 18 per cent for the same period last year),” the report added further. 

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Ministry Wise Expenditure

Ministry-wise expenditure indicates that the capex focus has been on Defence while spending on Railways and Roads so far is marginally lagging budgeted growth. The recent slower capex evokes an inkling that the capex will mildly undershoot the BE – we expect 32 per cent growth in FY24 vs the 36 per cent BE

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Supplementary Demands

Meanwhile, the first supplementary grant demands have been for Rs1.3trn, but there may have been expenditure savings from ministries who have not applied for extra funds. Additionally, while food subsidies and MNREGA allocation have increased (along with the cost of LPG cuts), fertilizer subsidy payments are likely to meet the budget estimate of Rs 1.75 trillion, as lower global prices and imports have helped curb the subsidy bill in the current fiscal. 

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“We expect an expenditure rejig/switch within ministries. Overall, total expenditure may overshoot the budget estimates by only Rs200-250 billion (0.1 per cent of GDP),” a report by Emkay mentioned. 

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Published January 28th, 2024 at 16:56 IST

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