NHAI, Railways on track to achieve 60% of capital expenditure target in H1

Capex by CPSEs touches 35% of target in Apr-July

Capital expenditure by 54 large central public sector enterprises and five departmental arms, having annual capex targets of Rs 100 crore and above, have collectively spent around 35 per cent of their annual capex target of Rs 7.33 trillion in the first four months of this financial year, a senior financial ministry told Business Standard.

“The National Highways Authority of India (NHAI) and the Railways are on track to achieve 60 per cent of their capex target by the end of the first half of FY24. The centre is pushing the big CPSEs to achieve 90 per cent of their target by the end of the third quarter,” he added.

The capital expenditure (capex) by this group of CPSEs is around Rs 2.56 trillion in the first four months (Apr-July) so far.

This is around 39 per cent growth in capex against Rs 1.85 trillion spent in the same period of FY23.

The central government had increased the capex target by 13.4 per cent in FY24 over the revised target of Rs 6.46 trillion in FY23.

During FY23, these CPSEs and departmental arms were able to achieve 100.5 per cent of their full-year revised target of Rs 6.46 trillion.

In the first four months of FY24, the NHAI has spent around Rs 63,180 crore (39 per cent) against its annual capital expenditure target of Rs 1.62 trillion; Indian Oil Corporation (IOCL) achieved 40 per cent of its capex target of Rs 30,395 crore on the back of the resumption of work on its pipeline projects and boosting its refining capacity.

The Railway Board, excluding Dedicated Freight Corridor Corporation of India (DFCCIL) and Kolkata Metro Rail Corporation (KMRCL), has spent around Rs  96,500 crore (40 per cent) of the capex target of Rs 2.44 trillion.

The official further said the capex targets are taken seriously by these CPSEs as that helps the government undertake their performance evaluation and decide on performance-related pay.

India’s largest crude oil and natural gas producer, ONGC, in the first four months, has spent around Rs 10,250 crore against the annual capex target of Rs 30,125 crore.

NTPC managed to achieve 20 per cent of its annual target of Rs 22,454 crore.

Hindustan Petroleum Corporation (HPCL) has spent around Rs 4,288 crore (42 per cent) of its annual capex target.

BSNL has spent around 51 per cent of its target of Rs 53,000 crore on the back of its expenditure on providing 4G equipment for new towers. 

Fuel retailers -- IOCL, BPCL, and HPCL -- saw their capex target raised 67 per cent, from Rs 30,293 crore in FY23 to Rs 50,605 crore in FY24 collectively.

The increase in petroleum capex would enable the retrofitting of refineries to meet emission standards and partly augment strategic reserves. 

The capex report of these CPSEs after the end of every month is sent for review to the Prime Minister’s Office (PMO).

The Centre has been focusing on a capex-led recovery for the economy through the exchequer as investments from the private sector lag.