Capex back at front & centre of govt's policy play as private sector watches from sidelines
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
The Indian government is closely monitoring its capital expenditure ( capex ) as private investment remains sluggish, a trend exacerbated by global uncertainties linked to US tariffs. In the first two months of the fiscal year, the Centre has recorded a notable increase in spending, with 20% of its annual allocation utilised, compared to only 13% during the same period last year, ToI reported on July 21 citing official data.Over the past five years, the government's capital expenditure has served as a crucial policy instrument aimed at stimulating economic growth. The rationale is that increased public spending will create demand for goods and services, leading to job creation and encouraging private investment.However, despite this proactive approach, the private sector remains hesitant, with investments primarily seen in sectors like cement and steel, where companies are responding to demand generated by government initiatives in infrastructure.Certain segments, particularly electronics, are experiencing growth due to schemes like the Production-Linked Incentive (PLI). Yet, overall capacity utilisation in various industries is not sufficiently high to warrant significant new investments.In sectors such as automobiles and energy, the transition towards greener technologies has also contributed to delays in investment decisions.Government officials acknowledge the current weakness in private investment and are exploring strategies to enhance economic activity. There are discussions about increasing capex in areas with potential for higher absorptive capacity.This could involve directing funds towards urban infrastructure projects, with planned discussions among the finance ministry and other government departments in the coming months.Looking ahead, the government is committed to maintaining a strong focus on capital expenditure, particularly given the anticipated economic growth in the years to come. For the current fiscal year, the Centre has set a capex budget of Rs 11.4 lakh crore, with almost half earmarked for roads and railways.The hope is that as public investment continues to rise, the private sector will eventually follow suit, leading to a more robust and self-sustaining economic environment.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
13 minutes ago
- Business Standard
Irdai proposes internal ombudsman to address claims up to ₹50 lakh
The Insurance Regulatory and Development Authority of India (Irdai) on Wednesday proposed the establishment of an internal insurance ombudsman for insurance companies (except reinsurers) with over three years of operations, to address unresolved complaints. The ombudsman will have the authority to hear complaints for claims up to Rs 50 lakh. The insurance regulator said it has proposed to issue the IRDAI (Internal Insurance Ombudsman) Guidelines 2025 to facilitate effective and speedy grievance resolution and to further improve complaint management standards. In its press release, Irdai said: 'The draft guidelines propose the establishment of an independent and impartial review mechanism within insurers to address unresolved or escalated complaints in a fair, transparent, and time-bound manner. Applicable to all insurers (except reinsurers) with more than three years of operations, the framework mandates the appointment of an internal insurance ombudsman to address complaints involving claims up to Rs 50 lakh.' 'Insurers may also appoint more than one internal insurance ombudsman, with well-defined jurisdiction, to ensure effective coverage and responsiveness,' Irdai added. According to the draft, a person shall be qualified for the appointment of internal insurance ombudsman only if they have served for at least 20 years in the insurance industry and held a post not less than two levels below that of a board director. The person must not be currently working with, or have previously worked with, the insurer or companies in the group to which the insurer belongs. The appointment shall be for a fixed term of three years or until the age of 70, whichever is earlier. The minimum age at the time of appointment shall not be less than 55 years. The ombudsman will report administratively to the managing director or chief executive officer of the insurer and functionally to the board or the Policyholders' Protection and Grievance Redressal and Customer Management (PPGR & CM) Committee. As per the proposed norms, the internal insurance ombudsman will consider complaints that have not been responded to within 30 days of receipt, complaints that have been partly or wholly rejected, and cases in which complainants have preferred an appeal. In each case, the ombudsman must record a 'reasoned decision', which shall be binding on the insurer. Irdai further stated: 'A complainant aggrieved by the decision of the internal insurance ombudsman of an insurer may, within 30 days of the date of receipt of communication of the decision, prefer an appeal before the insurance ombudsman in accordance with the Insurance Ombudsman Rules, 2017.' The guidelines will come into effect within three months of the date of their issuance. All stakeholders have been asked to submit their comments and suggestions on the proposed regulations on or before August 17, 2025.
&w=3840&q=100)
Business Standard
13 minutes ago
- Business Standard
IndusInd Bank to raise Rs 30k cr; promoters get board nomination nod
Private sector lender IndusInd Bank on Wednesday said its board of directors has approved a proposal to raise Rs 30,000 crore through a combination of debt and equity. Additionally, the bank's board has allowed the promoters to nominate up to two directors on the board, subject to approval from the Reserve Bank of India (RBI) and shareholders. In an exchange notification, the bank said the board, with RBI approval, has cleared amendments to the Articles of Association empowering the promoters to collectively nominate up to two directors on the board, classified as non-executive non-independent directors, subject to shareholder approval. Currently, the promoters have no representation on the bank's board. The board comprises non-executive directors only, as both the managing director and chief executive officer (MD & CEO) and the deputy CEO resigned in April, taking responsibility for accounting lapses. The bank's promoter, Ashok Hinduja, had said in March this year—when the bank disclosed discrepancies in its derivative portfolio leading to losses of over Rs 2,000 crore—that the promoters were ready to inject capital if required. However, with the bank's capital adequacy at comfortable levels, he stressed there was no immediate need for additional capital and that the bank had not sought fresh funds. As of March 2025, IndusInd Bank reported a Capital to Risk (Weighted) Assets Ratio (CRAR) of 16.24 per cent, with Tier I at 15.10 per cent and Tier II at 1.14 per cent. In the January–March quarter (Q4FY25), the bank reported a net loss of Rs 2,329 crore after substantially increasing provisions and reversing incorrectly booked revenue and income related to discrepancies in its derivatives and microfinance portfolios. The embattled lender saw its MD & CEO Sumant Kathpalia and Deputy CEO Arun Khurana step down in April, taking responsibility for a Rs 1,960 crore loss on the derivatives portfolio. The board submitted a shortlist of three candidates to the RBI on June 30 and is awaiting approval to appoint a new MD & CEO. Meanwhile, the board approved raising Rs 20,000 crore through debt securities, either via private placement or in permitted foreign currencies, subject to approvals. An additional Rs 10,000 crore will be raised to augment capital through the issuance or placement of securities including American Depository Receipts (ADR), Global Depository Receipts (GDR), Qualified Institutional Placement (QIP), and others. Separately, the bank informed the exchanges that Jayant Deshmukh has ceased to be a non-executive independent director of the bank with effect from the close of working hours on Wednesday, July 23, 2025, upon completion of his tenure.
Indian Express
13 minutes ago
- Indian Express
First announced in Budget 2008-09, 58-km railway project in Bihar's Kosi-Seemanchal region to finally get started
The Ministry of Railways has decided to commence the 58-km Kursela-Bihariganj New Line project, which falls in the Kosi-Seemanchal region of Bihar, 17 years after it was first announced. In a written response to a question in the Lok Sabha on Wednesday, Minister for Railways Ashwini Vaishnaw said that the project could not be taken up earlier because of low traffic projection. 'Kursela-Bihariganj (58 Km) New Line and Jalalgarh-Kishanganj (51.87 km) New Line projects were included in the Budget 2008-09. However execution of these projects could not be taken up due to low traffic projections. Subsequently, several representations were received to revive these two projects and after sanction of Bikramshila-Katarea New Line project, Kursela-Bihariganj New Line has become an operational requirement. As such, it has been decided to take up these projects,' said Vaishnaw. Officials said that an allocation of Rs 170.8 crore has been provided in the financial year 2025-26 for these projects. The 26.23-km Bikramshila-Katreah project with a bridge over river Ganga was sanctioned in August 2024. The total cost of the project is Rs 2,549 crore. This project is in the vicinity of Tejnarayanpur-Sahibganj (35 km) which could not be taken forward due to low traffic projections. The outlay for the project has been kept as Rs 64.05 crore in FY26. Vaishnaw added that a survey for 92-km Bihariganj-Virpur via Murliganj, Triveniganj, Bhimnagar new line project has been taken up and field survey has been completed. In response to another question in the Lok Sabha, Union minister Vaishnaw said a total of eight surveys, covering a length of 1,351 km, have been taken up to improve the connectivity in Bihar. This includes Deen Dayal Upadhyay-Kiul third and fourth line, Chhapra-Katihar third and fourth line, Bihta-Aurangabad new line, Rampurhat-Dumka-Bhagalpur doubling, and Bakhtiyarpur-Tilaiya doubling, among others. Dheeraj Mishra is a Principal correspondent with The Indian Express, Business Bureau. He covers India's two key ministries- Ministry of Railways and Ministry of Road Transport & Highways. He frequently uses the Right to Information (RTI) Act for his stories, which have resulted in many impactful reports. ... Read More
