Capex continues south-bound journey

BUDGET & THE ECONOMY

The defence ministry corners the maximum capital expenditure under the Plan and non-Plan heads together.

Maintaining the trend of falling allocation of capital expenditure as a percentage of total expenditure under the planned head, the government's budgeted allocation for 2008-09 has fallen to 13.81 per cent, compared with the revised estimate of 15.37 per cent in 2007-08.

The allocation for planned capital expenditure as a percentage of the total planned expenditure was 16.29 per cent in 2006-07, against 20.46 per cent in 2005-06. It was 33.85 per cent in 2004-05.

Capital expenditure is typically spent on building assets and capacities across various sectors, which in turn create jobs and reflect the strength of an economy.

Planned capital expenditure has been rising steadily since 2005-06 after it fell sharply to Rs 28,779.88 crore that year from Rs 44,781.27 crore in 2004-05. 
 

GOING DOWN Planned capital expenditure as % of total plan expenditure
2008-09 (BE*)	13.81
2007-08 (RE*)	15.37
2006-07	16.15
2005-06	20.46
2004-05	33.85
* BE- Budget estimate,  RE-Revised estimate

Finance Minister P Chidambaram has allocated Rs 33,618.29 crore as planned capital expenditure for 2008-09, which is 5.34 per cent higher than the revised capital expenditure of Rs 31,912.69 crore for 2007-08. The planned capital expenditure for the next financial year is 22.51 per cent higher than the Rs 27,441.82 crore spent in 2006-07.

The bulk of the capital expenditure under the Plan head has been cornered by the Ministry of Road Transport and Highways, Department of Atomic Energy, Ministry of Urban Development, Ministry of Economic Affairs and the Department of Space.

The largest allocation for planned capital expenditure has been made to the Ministry of Road Transport and Highways.

The ministry has been allocated Rs 5,948.79 crore for 2008-09, 5.89 per cent higher than the revised estimate of Rs 5,617.65 crore for 2007-08, and 29.74 per cent more than the Rs 4,585 crore spent in 2006-07.

The Department of Atomic Energy would receive Rs 2,944.03 crore as investment for creating infrastructure in 2008-09, 24.61 per cent higher than the Rs 2,362.68 crore it received in 2007-08. It is, however, a marginal 1.47 per cent higher than the Rs 2,901.31 crore spent in 2006-07.

The Ministry of Urban Development has been allocated Rs 2,050.25 crore for 2008-09, 17.76 per cent lower than the revised estimate of Rs 2,493.12 crore spent in 2007-08. It is, however, nearly double the Rs 1,087.33 crore spent in 2006-07.

The Department of Economic Affairs has been allocated Rs 1,992.10 crore compared with the revised figure of only Rs 23 crore in 2007-08.

The Department of Space will spend Rs 1,779.50 crore to create assets, 32.62 per cent higher than Rs 1,344.28 crore in 2007-08.

The highest amount of capital expenditure under the Plan and non-Plan heads together has been allocated to the defence ministry. Defence services have been allocated Rs 48,007 crore for 2008-09, all under the non-Plan expenditure.