View: GoI's focus on capex to address infrastructure and energy deficits pays off
Synopsis
The GoI's focus on increasing capital expenditure (capex) to address infrastructure and energy deficits has been significant. Public capex as a percentage of GDP has risen from 1.65% in 2019-20 to 3.2% in 2023-24, with its share in public expenditure increasing from 12.5% to 21.6%. This strategy, pursued even during the pandemic, has compensated for sluggish private investment, contributing to India's high growth rate above 7%. However, there's been a decline in revenue expenditure, affecting sectors like education and health, necessitating active policy measures like privatisation and asset monetisation to sustainably manage deficits and fund development.
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