Large central public sector entities — companies and undertakings — achieved about 80% of their aggregate capital expenditure target for FY22 by February-end, by investing Rs 4.72 lakh crore, according to official sources.
The National Highways Authority of India (NHAI) was the top investor with a capex of Rs 1.42 lakh crore, or 108% of its FY22 target, in April-February. Indian Railways was lagging behind NHAI as it achieved 68% of the FY22 target of Rs 1.95 lakh crore in the first eleven months of the year.
However, the 40-odd undertakings and central public sector enterprises (CPSEs) with a minimum annual capex of Rs 500 crore will achieve their aggregate annual target of Rs 5.95 lakh crore for FY22, as some entities will exceed their annual capex goal, a senior official told FE.
Investment expenditure as measured by gross fixed capital formation grew by just 2% in Q3FY22 over the level in Q3FY21. Continued momentum in capital expenditure by the Centre, CPSEs and states is necessary to push GFCF, as low capacity utilisation and continued uncertainties, may deter private investors from taking the plunge.
While the NHAI, which is developing several expressways including Delhi-Mumbai, Delhi-Katra, Bengaluru-Chennai and Delhi-Dehradun, is accelerating capex, the railways is lagging in its plans of the laying of new lines, doubling of tracks, etc.
Power producer NTPC — which is currently implementing 3,017 MW of solar projects — has fully achieved its FY22 capex target of Rs24,000 crore in April-February.
Fuel retailer-cum-refiner Indian Oil Corporation invested about Rs27,000 crore (95% of full-year target). It is expanding the capacity of Barauni refinery, Panipat refinery and Gujarat refinery.
During the period, upstream oil company ONGC reported capex of about Rs 23,000 crore, or about 77% of its FY22 capex target of Rs29,800 crore. The oil explorer’s capex deployment was mainly in KG 98/2 Cluster II, Mumbai High South Redevelopment Phase IV, life extension of well platforms and Heera Redevelopment Phase-III Project.
In the last few years, capex by CPSEs and other agencies has remained robust. Capex by these entities rose 4% on-year to Rs4.6 lakh crore in FY21.
Improved revenues have helped the states also to maintain a robust capital expenditure pace in the first nine months of the current financial year. Data gathered by FE of 20 states showed that these states reported a combined capex of Rs 2.74 lakh crore in April-December of FY22, up 52% on the year. The Centre’s capex in April-January of the current financial year stood at Rs 4.42 lakh crore, an annual increase of 22%.
