Capital spending by large central public sector enterprises (CPSEs) and other government entities has gained momentum in the past three months, reaching 94% of the full-year target by February-end, a senior official reported. This surge was driven by increased spending from petroleum firms and the National Highways Authority of India (NHAI), marking a sharp recovery after a slowdown earlier in the financial year due to election-related uncertainties in project execution.
As of February, CPSEs with an annual capital expenditure (capex) target of at least ₹100 crore spent ₹7.39 lakh crore, nearing the full-year target of ₹7.87 lakh crore. This is a significant improvement, considering that by November 2024, only 56% of the target had been achieved. The data, which was submitted to the Prime Minister’s Office in March, indicates a substantial recovery after a slower start to the fiscal year.
This year’s capex performance stands in contrast to the same period in the previous financial year, when CPSEs achieved 92% of their capex target by February-end, despite the absence of a general election.
The data also covered other key entities like the Railway Board, NHAI, Delhi Metro Rail Corporation, and the Damodar Valley Corporation. Analysts suggest that the increased spending by CPSEs and these entities will help offset any shortfall in public capex, especially since several states are expected to miss their targets this fiscal.
Among the key contributors, state-run petroleum firms, such as ONGC, Indian Oil Corporation, HPCL, and BPCL, have seen significant capex growth. ONGC led the pack, with ₹80,861 crore spent, exceeding 233% of its target for the year. The NHAI also outperformed, spending ₹2,05,758 crore, more than 121% of its full-year capex target.
The Centre is likely to meet its revised capex target for 2024-25, which has been adjusted to ₹10.18 lakh crore from ₹11.11 lakh crore, with ministries and departments achieving 74.4% of their revised target as of January.
