Riding on defence projects, Centre’s budgetary capex grew a whopping 58% to Rs.52,536 cr. in April-May this year. Not just the government, its companies and undertakings also have sustained their robust capex pace in the first quarter of 2017-18. The central public sector enterprises (CPSEs) and departmental undertakings (DUs) with annual capex plans of Rs.500 crore and above have invested Rs 57,500 crore in April-June this year — though this was only 18% of the annual target, in no year has Q1 capex by these entities been anywhere close to this year’s. It is unclear whether the spending by the Centre via budget and its firms has helped arrest the decline in gross fixed capital formation (GFCF) witnessed in the fourth quarter of the last fiscal, as private investments have hardly recovered. Nevertheless, the data from the specified CPSEs and DUs signal that public spending, which was the principal growth driver in 2016-17, retained that role into the current financial year.

(Financial Express)