Strong signs of government capex recovery in second half of FY25
A strong recovery in central government capex is expected in the second half of this fiscal (H2 FY25), according to a report on Wednesday.
IANS
Dec 11, 2024 01:44
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New Delhi, Dec 11 (IANS) A strong recovery in central government capex is expected in the second half of this fiscal (H2 FY25), according to a report on Wednesday.
Defence, roadways and communication could show a sharp sequential jump, whereas Railways are, surprisingly, ahead of the full-year run rate, according to the report by Emkay Global Financial Services.
The year-on-year growth for the rest of FY25 will look more impressive because of front-loaded expenditure in FY24 (52 per cent of budgeted capex in FY24 year-to-date).
The capex slowdown in the first half of his fiscal (H1 FY25) has been largely led by the elections and the monsoons.
“A robust recovery is expected in 2HFY25, with many projects now being bid out and execution likely to accelerate,” the report mentioned.
Another report by Jefferies earlier this month said that the central government's capital expenditure is expected to increase by a robust 25 per cent in the second half of the financial year 204-2025 compared to the same period of the previous year.
While populist policies have gained traction in the states, the Centre’s spending priorities show a balanced approach to spur economic growth and create more jobs through an increase in investment in big infrastructure projects, it mentioned.
Total central government expenditure, which includes allocations to social welfare schemes, is set to rise by around 15 per cent year-on-year in the second half of 2024-25.
Meanwhile, India’s Q2 GDP growth should begin to improve further by the January-March period (Q4) FY25, according to industry experts.
There are several encouraging signs within the data, like private consumption grew at an impressive 6 per cent, significantly higher than both the overall GDP growth rate and the 2.6 per cent recorded in Q2 FY24.
A sharp rebound in H2 FY25 is expected, driven by government and private capex, robust agriculture growth, and buoyant consumption demand, with GDP growth projected at 6.6-6.8 per cent for FY25.
--IANS
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