India To Trim Spending Limit In Coming Quarters To Meet FY25 Capex Target

India is expected to trim down its quarterly expenditure to meet its capex target for FY25. While expenditure during the Q1 (Apr-June) slowed down owing to general elections, the expenditure during the first 6 months (Apr-Sep) stood at about 44% of the yearly target. Weaker spending has aggravated the recent slowdown in the poor economic economic conditions, analysts said.

A government source said, “Capital expenditure will pick up in the coming months, and we will ensure as much as possible capex happens in January-March.”

Capital expenditure stood at 4.15 trillion rupees ($49.18 billion) during the September quarter, which is 37% of the annual target. The capex target for this fiscal year stands at 11.11 trillion rupees.

Overview of the government's borrowing

The government is unlikely to change its borrowing limit plans for FY25. It also aims to borrow 14.01 trillion rupees via bonds in the current financial year. During fiscal year 2021, the country borrowed 12.6 trillion rupees as the funds dried up during the lockdown. Notably, the borrowings have gone through the roof since then.