Central PSEs invest Rs 5.5 trillion in FY22, nearly meet combined target

The National Highways Authority of India (NHAI) has emerged as the top investor for the second year in a row among central government agencies and undertakings, which together met 97% of their FY22 revised target of Rs 5.75 trillion. NHAI invested 120% of its FY22 target while the railways, another large investor, met 79%.

The combined capital expenditure by 40-odd large CPSEs and departmental undertakings — all with annual capex budgets above Rs 500 crore — was Rs 5.55 trillion in FY22. This was 21% higher than the capital spending by these entities in the previous year.

NHAI was the largest investor with capex rollout of Rs 1.57 trillion in FY22, 21% more than the target of Rs 1.3 trillion and 26% more than a year ago. The authority, which is developing several expressways, including Delhi-Mumbai, Delhi-Katra, Bengaluru-Chennai and Delhi-Dehradun, built 4,325 km of roads in FY22.

Railways invested Rs 1.53 trillion in FY22, which was about 79% of its annual target and up 23% on year. Among others, railways’ plan for station redevelopment could not take off.

Railways was followed by Indian Oil Corporation (Rs 30,920 crore, 108% of its target), ONGC (Rs 27,000 crore, 90%) and NTPC (Rs 25,420 crore, 107%). Coal India also exceeded its FY22 investment target of Rs 14,680 crore, achieving Rs 14,830 crore. Nuclear Power Corporation invested Rs 14,230 crore or 80% of its FY22 target of Rs 17,810 crore.

While CPSEs received no budgetary support for capex, railways and NHAI met a substantial amount of their capex through budgetary support. Besides government agencies and CPSEs, the Centre also prodded states to push public capex.

Investment expenditure as measured by gross fixed capital formation (GFCF) grew by just 2% on year in Q3FY221. Continued momentum in capital expenditure by the Centre, CPSEs and states is necessary to push GFCF until private investors take the plunge.

The 20 states reviewed reported a combined capex of Rs 3.44 trillion in April-February of FY22, up 37% on year, compared with an year-on-year decline of 14% witnessed in the corresponding period of FY21.

The Centre’s capex stood at Rs 4.85 trillion or 81% of the FY22 revised target of Rs 6 trillion, indicating a shortfall in achievement for the full year.

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