Finance Minister Nirmala Sitharaman considered the Capital Expenditure (Cap-ex) plans for the Ministry of Road, Transport and Highways and the Ministry of Communication, urging the ministries to achieve targets for the previous two quarters in the third quarter. This was told by the Finance Minister, in a meeting in New Delhi held on Tuesday, September 3.

As per an official statement, Sitharaman encouraged the ministries to accelerate implementation and compensate for the targets set for the first and second quarters in the third quarter of the current fiscal year.

The meeting is part of a series of review sessions with various ministries and departments with significant capex outlays. The talks in the Ministry of Communication review centred on Capex plans for FY2024-25, including the Bharat Net Programme, 4G mobile projects utilising Indigenous Technology, Network for Spectrum, and efforts to achieve 4G saturation.

During the Ministry of Road, Transport and Highways review, main discussion points included overall Capex on National Highways, targets for awards and construction in the upcoming quarters of FY2024-25, attracting private capital through various measures, and meeting asset recycling targets.

She stressed the significance of setting quarterly targets and ensuring their accomplishment within a stipulated timeframe. She urged the respective Ministries to accelerate implementation and compensate for the targets set for the first and second quarters in the third quarter of the ongoing fiscal year.

According to Bloomberg, Goldman Sachs reduced India’s GDP forecast by 20 basis points last week, citing a slowdown in government expenditures. Ratings agency ICRA also expected that India’s GDP growth would decrease to a six-quarter low of 6% in the first quarter. The country’s GDP stood at 6.7%, marking a 15-month low.

This decline has been linked to reduced government capital expenditure and diminished urban consumer confidence, particularly highlighted in the RBI’s Consumer Confidence Survey and the first quarter also witnessed a slowdown in activity due to the parliamentary elections and low government spending.

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