India to continue capex push to sustain GDP growth,Sitharaman

The Centre will continue to prioritise capital expenditure (capex) to sustain economic growth and maintain the country's growth momentum, Finance Minister Nirmala Sitharaman said on Monday.
Addressing an event organised by HSBC in Mumbai, Sitharaman said public capital expenditure would remain a key pillar of the government's growth strategy until private sector investment gains momentum."Capex is a very important component of our growth strategy because till such a time the private sector is also going to come in to expand capacities or establish newer capacities, it is important for the government to push through with the capital expenditure," she said.However, the Finance Minister also stressed the need to closely monitor the fiscal deficit while maintaining the government's investment-led growth strategy.
According to data released by the Controller General of Accounts (CGA), the Centre's fiscal deficit widened to Rs 7.14 lakh crore during April-September, around 25 per cent higher than the corresponding period last year. The increased expenditure during the first half of the financial year could put pressure on the government's full-year fiscal calculations.SBI Research estimates that the Centre's fiscal deficit for FY27 could exceed the Budget Estimate by Rs 1.2 lakh crore. The projected increase includes a revenue loss of Rs 1.1 lakh crore due to the excise duty cut, an additional Rs 90,000 crore in fertiliser subsidies and Rs 48,000 crore in petroleum and LPG subsidies."These are structural factors. In addition, there is also a new GDP base impact. We expect because of structural issues and the new GDP base, the overall impact on FY27 budgeted fiscal deficit at 4.3% will be an additional 40 bps," SBI Research said.

(Business Correspondent)