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India’s Capex Push Must Build Capability, Not Just Assets

India’s Capex Push Must Build Capability, Not Just Assets
How to measure the success of India’s capex strategy · indianexpress.com

The Indian government is spending more money on buildings, roads, railways and other long-term projects.

This spending is called capital expenditure, or capex.

Good public projects can make it easier and cheaper for private companies to start factories and businesses.

For example, better roads and ports can help companies move goods more quickly.

These projects create jobs while they are being built and can improve productivity after they are finished.

However, spending money does not automatically guarantee useful results.

Projects can be delayed, underused or made more expensive by problems such as land disputes and weak coordination.

India also needs skilled workers, researchers and strong technology capabilities.

The article says capex should be judged by whether it makes the economy more productive, not simply by how much money is allocated.

Key facts

2026-27 capex target
Rs 12.22 lakh crore
2026-27 effective capex
Rs 17.15 lakh crore, including grants to states and other agencies for capital assets
June capital expenditure
Rs 89,255 crore, up 66% year-on-year
Private corporate capex
Estimated at about Rs 11.44 lakh crore in 2025-26
Capacity utilisation
74.8% in the second quarter of 2025-26, compared with a pre-pandemic average of 72.9%
Gross fixed capital formation
About 32.3% of GDP in 2025-26
Fiscal constraints
Interest payments are budgeted at about Rs 14.04 lakh crore and the fiscal deficit at Rs 16.96 lakh crore, or 4.3% of GDP, for 2026-27

Sources

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