At 20%, CPSEs’ capex pace strong, yet below target

Capital expenditure by large central public-sector entities — companies and undertakings – rose by 19 per cent on year to Rs 3.1 lakh crore in the first eight months of the current financial year, official sources told FE.

Capex by these state-run entities, each with annual investment budget of over Rs 500 crore, was 52 per cent of their aggregate capital expenditure target of Rs 5.96 lakh crore for FY22 in April-November period.

Investment expenditure as measured by gross fixed capital formation (GFCF) grew by 11 per cent in Q2FY22 over its level in Q2FY21 and by 1.5 per cent when compared to its level in 2QFY20. Continued momentum in capital expenditure by the Centre, CPSEs and states is necessary to push GFCF, as low capacity utilisation and continued uncertainties over the pandemic are deterring private investors from taking the plunge.

In April-November of FY22, the railways was the largest investor by deploying capex of about Rs 93,000 crore or 48 per cent of its annual target of Rs 1.95 lakh crore. Railways’ investment is largely in the laying of new lines, doubling of tracks, augmenting traffic facilities and construction of rail over bridges/road under bridges. fe

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