The Centre, CPSEs and state governments undertake capex roughly in the 2:3:3 ratio. State PSEs too spend on asset creating ventures.

The economic growth rate in the second half of the current financial year, especially during the last quarter (Q4), might get a push from robust capital expenditure by central public sector enterprises and other government undertakings like NHAI and the railways (CPSEs). While budgetary capex for FY20, as per the latest budget, is slated to be Rs 3.49 lakh crore, up 3% from the budget estimate made in July last year, CPSEs among themselves will expend Rs 5.1 lakh crore as capex in the year, up 14% from the initial estimate.

Although no aggregate data is currently available on capex undertaken by CPSEs so far in the current fiscal year, information furnished by some of the large CPSEs indicate that they are largely on track with the budget estimate. Oil CPSEs, for instance, spent Rs 63,000 crore or 68% of their FY20 target by December. If the revised budget figures and the usual trend of aggressive spending in Q4 are any indication, these companies could have already accelerated their capital spending.

Economic expansion is estimated to crawl to just 5.7% in FY20, the lowest since FY13, as a slowdown in investment and private consumption might linger through the second half of the fiscal. The growth in H1 averaged 4.75% (the FY19 GDP has recently been revised down). The Centre, CPSEs and state governments undertake capex roughly in the 2:3:3 ratio. State PSEs too spend on asset creating ventures.

Among the government-owned entities, Building Material and Technology Promotion Council (BMTPC) has made a provision to invest Rs 15,000 crore in revised estimate compared with no such plan earlier. BMTPC undertakes research, development and large scale application of new building material technologies. Hudco, which invests in housing projects and allied activities such as water supply, roads and transport and other commercial infrastructure, would scale up its investment by Rs 14,387 crore to Rs 31,887 crore in RE for FY20. National Bank for Agriculture and Rural Development would invest Rs 7,000 crore (off-budget funding of government schemes) in water and sanitation projects while Higher Education Financing Authority would be investing Rs 2,700 crore in FY20 as compared with no such plan earlier by these two bodies. Among others, oil retailer HPCL would be scaling up its investment by Rs 2,000 crore to Rs 11,500 crore in this fiscal.