As the economy picks up thread post-Covid-19, at least two central infrastructure ministries – Railways and Highways Transport and Highways – have registered an accelerated pace of spending within the first five months of the current financial year.
These two ministries account for almost half (Rs 3.24 lakh crore) of the total capital expenditure (Rs 7.50 lakh crore) in the 2022-23 budget. Nonetheless, the importance of their first five months’ expense sample is that most of it were capital expenditure – meaning expenditure that results in new asset creation or raises the standard of the current one.
Of the Rs 85,279 crore used by the Railways in April-August this year, 79 per cent or Rs 67,244.99 crore was capital expenditure. For highway transport and highways, capital expenditure was 95 per cent of the total expenditure of Rs 1.15 lakh crore within the first five months.
In 2022-23, only five central government ministries account for 72% of the total CAPEX of Rs 7.50 lakh crore. These are highway transport and highways (Rs 1.87 lakh crore), defence (Rs 1.60 lakh crore), railways (Rs 1.37 lakh crore), telecommunications (Rs 54,150 crore), and housing and city affairs (Rs 27,341.01 crore).
This means that the government has pressured public spending to accelerate progress as the private sector is still against speculation.
Bunching expenditure is avoidable.
The pace of expenditure from the Railways is much higher than the average expenditure of the government in the first five months of this year. The government has utilized over a third of the total budget expenditure of Rs 39.44 lakh crore – Rs 13.90 lakh crore in April-August.
The Union Ministry of Highways, Transport and Highways (MoRTH) under Nitin Gadkari took the Ministry of Railways seriously in spending. It has utilized 58 per cent (or Rs 1.15 lakh crore in April-August) of its annual allocation of Rs 1.99 lakh crore for 2022-23. Though more, MoRTH spent a better 66 per cent of its yearly funds during the same period in 2021-22.
Apart from railways and highways transport, the expenditure by the Rajnath Singh-led defence ministry as part of the total allocation in the first five months is higher than the corresponding period last year. According to the CAG’s information, the Department of Telecommunications and the Ministry of Housing and Urban Affairs have been lagging in their efficiency in the previous 12 months.
The Ministry of Chemical Compounds and Fertilizers, headed by Mansukh Mandaviya, has also utilized more than half its budget in the first five months. It has spent 57 per cent (or Rs 61,229.47 crore within the first five months) of its total outlay of Rs 1,07,715.38 crore for 2022-23.
CGA information shows that even after five months, at least ten ministries or departments could not spend even one-tenth of the total funds allocated to them for 12 months. The G Kishan Reddy-led Union Tourism Ministry led the pack using only 2 per cent (or Rs 41.79 crore) of the annual allocation of Rs 2,400 crore made in 2022-23.
