[ad_1]
The Bank of Baroda report says that many states, led by Andhra Pradesh, Maharashtra, Ube and Kerala, have failed to meet the target in terms of actual capital expenditure (capital expenditure) on various fronts despite getting the required payments from the central government in FY2023.
Countries’ performance has been mixed. A total of Rs 7.49 crore has been budgeted by these states. However, they spent just Rs 5.71 crore which is 76.2% of the total,” according to the Bank of England report. Fourteen states — out of data available for 25 states — hit less than 75 per cent of the target in FY2023.
The center achieved its goal both in terms of actual capital expenditures in various fields as well as loans granted to countries that were to be used for capital expenditures. The Bank of England report stated that the fiscal deficit target was also maintained this year.
According to the BoB, only 4 states have achieved and crossed the 100% mark: Karnataka, Sikkim, Arunachal Pradesh and Bihar. Two more came close with more than 98% being Jharkhand and MP. She said that while 11 states crossed the 80% threshold, the others had a below-average completion rate.
“The two largest states in terms of planned capex, UP and Maharashtra had an outlay of Rs 2.19 crore which is 29.2% of the total capex of these 25 states. Their total completion was only 70% which lowered the average of the entire sample.” Maharashtra achieved only 72.4 per cent of the target, Kerala 69 per cent and Kerala 69.4 per cent.
The lowest performer came from Andhra Pradesh with 23% followed by Tripura, Nagaland and Haryana which had less than 50% completion rate. Of these 14 states, Andhra Pradesh and Punjab were the only two states to have exceeded their fiscal deficit numbers in the budget and may have had a reason for the shortfall in capital expenditure spending, although these two states are disproportionate.
On the reasons for countries not achieving capital expenditure targets, the Bank of England said, “They tend to wait near the end of the year to see how their financial balances go and are not in a position to complete them by March. There are not enough projects that countries can undertake, and therefore A combination of lapses in planning and execution. This ultimately leads to slippage.”
“There can be a significant amount of preoccupation with items included within revenue expenditures so that there is less attention here. There can be a case of over-budgeting to begin with to create emergencies. Sometimes other externalities such as uncertainty in the political climate, Bob said It can come in the way of project implementation.
The underachievement phenomenon is not really new as the rate in FY20 was around 72% although it improved in FY22 by 95%. Countries definitely have to improve their track record here in order to drive the investment cycle forward as it will take some time for the private sector to come in a large scale way. At present, the center is doing the heavy lifting which is insufficient as the budgeted expenditures for the levels of government are almost the same. It was hoped that the advance payment in FY24 would be more decisive, she said.
Government capital expenditure has been seen as the main driver of capital expenditure in the economy in the past few years. This is because the private sector was not in a position to invest for various reasons. These range from low demand to overcapacity and high inflation.
[ad_2]
