Capex quandary: On the economic data, policy
Since the COVID-19 pandemic, the Centre has been using public capital expenditure on infrastructure to pump prime the economic recovery. The mantra has been that infrastructure building will stoke demand for products such as cement and steel, generate jobs in construction, and together trigger a strong multiplier effect on the economy, eventually creating conducive conditions for private investors to plan greenfield and brownfield projects. In Budget 2024-25, Finance Minister Nirmala Sitharaman said the government will endeavour to maintain strong fiscal support for infrastructure over the next five years, in conjunction with imperatives of other priorities and fiscal consolidation. She announced ₹11.11 lakh crore of capex spends this year, amounting to 3.4% of GDP. That goal is unlikely t...