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Government expenditure continued to rise for the third straight month in June and the momentum is likely to continue given the robust growth in revenue receipts, says a Deutsche Bank report.
The government has spent 25 per cent of Fiscal Year 2015-16 budgeted plan expenditure in April-June period as against 19 per cent during the same period last year, the report said.
"We believe that this tempo is likely to continue given robust growth in revenue receipts with the government already receiving around 12.4 per cent of the annual budgeted revenues vs 9.6 per cent in the corresponding period last year," Deutsche Bank said in a research note today.
The month of June marks the third consecutive month of rising plan capital expenditure, "which firmly underscores the government's stated commitment to ramp up vital public investments in areas which have significant multiplier impact on growth," the Deutsche Bank report said.
"Continuation of spending momentum - seen in the first three months of the fiscal year -is likely to result in a strong and visible impact on macro economic data and on corporate earnings as economic activity begins to pick up," the report added.
The report noted that despite the jump in expenditure, absolute fiscal deficit was down 13 per cent year-on-year in April-May.
According to the global financial services major, the plan expenditure of the government was driven primarily by infrastructure oriented ministries.
The April-June period of 2015 saw large yoy growth in spends on roads and highways, railways, urban development, rural development, power and renewable energy.
In addition ministries that also witnessed impressive yoy growth in plan expenditure include drinking water and sanitation, health, tribal affairs, the report noted.
