India FY24 capex may rise 30% with focus on growth – Barclays

MUMBAI — India’s federal government is likely to increase capital expenditure by 30% to 9 trillion Financial Post Top Stories Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc. By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network…
India FY24 capex may rise 30% with focus on growth – Barclays

MUMBAI — India’s federal government is

likely to increase capital expenditure by 30% to 9 trillion

Financial Post Top Stories

Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.

By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300

rupees ($110.59 billion) in the next fiscal year to fuel growth,

Barclays said.

“In a pre-election year, we do not expect any material push

to increase the pace of fiscal consolidation, and any extra

fiscal room is likely to be spent in order to ensure economic

growth remains robust,” economists Rahul Bajoria and Shreya

Sodhani said in a note on Friday.

The analysts expect capital expenditure (capex) to cross

19.5% of total government spending for the first time ever.

Barclays expects funds to be reallocated from programs

such as last year’s vaccination drive to other expenditure,

perhaps targeting the outlay for healthcare sector.

India will present its budget for 2023-24 on Feb. 1, and

this would be its last full-year budget before the general

elections of 2024.

The government could continue to prioritize capex, as

revenue expenditure looks set to be broadly steady, allowing for

further fiscal consolidation.

Barclays expects the government to target a fiscal deficit

of 5.8% of gross domestic product, down from 6.4% in this

financial year, with total expenditure pegged at 46 trillion

rupees.

“The government is also likely to continue to support its

production-linked incentives (PLIs), which are starting to bear

fruit with production and exports rising in several areas,

including electronics,” the economists said.

The foreign brokerage also expects the government to use

resources from state-run companies to fund capital projects.

The central government may increase budgetary allocation for

loans to states for capex to 1.50 trillion rupees from 1

trillion rupees this fiscal to enable more infrastructure

spending, Barclays said.

Expectations of fiscal deficit and borrowing targets in

trillion rupees for FY24

Brokerage name Fiscal deficit Centre Centre State State

(% of GDP) gross net gross net

Goldman Sachs 5.9 16.8 13 8 5.3

Barclays 5.8 – – – –

Societe Generale 5.5-6 – – – –

DBS 5.9 15.5 – – –

ICRA 5.8 14.8 10.4 9.6 6.8

($1 = 81.3820 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Dhanya Ann Thoppil)

Read More

Total
0
Shares
Leave a Reply

Your email address will not be published.

Related Posts
U.S. parents still divided over school COVID masking rules -survey
Read More

U.S. parents still divided over school COVID masking rules -survey

Author of the article: Reuters Bhanvi Satija and Leroy Leo As public schools around the United States lift COVID-19 mask mandates, parents are divided over the issue, with nearly 43% saying face covering requirements should remain in place to prevent virus transmission, according to a survey by the Kaiser Family Foundation (KFF). Most parents who…
Schroders gets nod to set up China fund unit as Beijing speeds up approvals
Read More

Schroders gets nod to set up China fund unit as Beijing speeds up approvals

SHANGHAI — Schroders has obtained Chinese regulatory approval to set up a wholly-owned mutual fund unit in China, as Beijing accelerates opening up its giant financial sector to foreigners. China abruptly dismantled its strict, three-year zero-COVID policy in early December, and the government has apparently stepped up efforts to woo foreign companies and investors to…
U.S. Navy Tests New Generation Laser Weapon in the Middle East
Read More

U.S. Navy Tests New Generation Laser Weapon in the Middle East

Author of the article: Bloomberg News Selcan Hacaoglu (Bloomberg) — The U.S. Navy successfully tested a new generation laser weapon system earlier this week in the Gulf of Aden, the Navy’s Middle East-based 5th Fleet said in a statement on Thursday. During the demonstration on Wednesday, a high-energy laser weapon was fired from the USS…