Credit rating agency Crisil on Wednesday said that the capital expenditure spelt out in the FY23 Union Budget was “not as high as it sounds”.
It, however, added that considering that governments usually tend to cut capex during a crisis, the Centre has maintained focus on growth-spurring initiatives amid the pandemic.
The research wing of the agency said excluding the ₹1-lakh crore loans to States for capex included in the headline figure of ₹7.50 lakh crore or 2.91%, the actual spend in FY23 will dip to 2.58% of GDP, which is barely at par with the revised estimate of FY22. Crisil also pointed out that the overall number showing an increase had been ‘offset’ via a reduction in internal and extra budgetary resources (IEBR), which bucket funds the capex of central public sector enterprises.
The IEBR has been budgeted at 1.82% of GDP, lower than the pre-pandemic average (FY18 to FY20) of 3.33%, it said. The overall central capex for FY22 — the sum of effective budgetary capex and IEBR — would remain at 5.96% of GDP, the same as pre-pandemic average between FY18 and FY20.