CAPEX: Government utilized only 37.28% of effective capital expenditure in first half of FY25

According to data released by the Ministry of Finance, the central government has utilized only 37.28 percent of the effective capital expenditure (ECE) provisioned in the budget in the first half of the financial year 2024-25. ECE represents the total capital outlay of the government for the creation of capital assets and related expenditures. It is calculated as the sum of capital expenditure and grants for the construction of capital assets.

The Finance Ministry said, "Effective capital expenditure in the first half of FY 2024-25 was Rs 5.60 lakh crore" For the financial year 2024-25, the government had estimated the ECE at Rs 15.02 lakh crore in the budget. This includes Rs 11.11 lakh crore of central capital expenditure, Rs 4.15 lakh crore as direct capital expenditure, and Rs 1.45 lakh crore given to the states as grants for the creation of capital assets.

The Finance Ministry, however, explained that this spending reflects the government's commitment to improving infrastructure and creating durable assets for long-term economic growth. It said the total government Expenditure during the 1st Half of the Financial Year 2024-25 was estimated at Rs 21.11 lakh crore or about 43.8 percent of Budget Estimates. The total budgetary expenditure for FY 2024-25 was estimated at Rs 48.21 lakh crore.

Of the total budgeted amount of Rs 37.09 lakh crore, the government spent 45.7 percent or Rs 16.97 lakh crore on the revenue account. Of this, Rs 1.45 lakh crore was accounted for by grants-in-aid for the creation of capital assets. Rs 27.12 lakh crore was accounted for by interest payments, defense services (revenue), pensions, major subsidies, and grants-in-aid of states and union territories.

Interest on borrowings paid in the first half of FY 2024-25 stood at Rs 5,15,010 lakh crore against the budget estimate of Rs 11,62,940 crore. Rs 2,82,773 lakh crore was the budget estimate for defense services and Rs 1,45,181 lakh crore was spent in the first half of FY 2024-25.

While the Budget had estimated a grant-in-aid for states and UTs to the tune of Rs 6,41,460 lakh crore, Rs 2,39,296 lakh crore was released in the first six months of the current fiscal. Similarly, in the case of major subsidies, Rs 2,14,658 crore was released against the budgeted amount of Rs 3,81,175 lakh crore in the first half of FY25. The other key head is pension payout -Rs 1,48,989 lakh crore payout has been made from its budgetary allocation of Rs 2,43,296 lakh crore.