Tamil Nadu’s capital expenditure (capex) increased by nearly 31.7% to ₹17,773.80 crore in the first half of fiscal 2023-24 from ₹13,499.24 crore in the same period last year, according to the unaudited provisional figures from the Comptroller and Auditor-General (CAG).
Capex is incurred by a State government to create fixed assets such as roads and bridges, irrigation structures, schools, hospitals and investments in Public Sector Undertakings. It helps in improving economic activity and creating jobs.
During April-September 2023, Tamil Nadu incurred 40.06% of the budgeted amount of ₹44,366 crore for 2023-24.
Uttar Pradesh, Madhya Pradesh, Telangana, Gujarat and Tamil Nadu accounted for over half of the aggregate capex of ₹2.62 lakh crore incurred by 23 States in the first half of fiscal 2023-24, India Ratings and Research said in a report.
The capex of these States grew in the range of 31.7% to 190.3% in the first half of 2023-24 from the previous year, it added.
Madhya Pradesh, Telangana and Tamil Nadu have been able to meet over 40% of their budgeted capex target for fiscal 2024. However, Uttar Pradesh and Gujarat were able to meet only under 30%, which indicates that they might fall short of their target, India Ratings further noted.
The ratings firm also used the capital outlay/total expenditure (COTE) ratio to measure the quality of public expenditure. A higher ratio means that a higher proportion of the total expenditure is channelled towards capex, which is positive for long-term productive capacity of the economy, it noted.
For Tamil Nadu, the COTE ratio was 11.3% in the first half of 2023-24, 10.3% in the first half of 2022-23 and 10.6% in the first half of 2021-22. It ranged between 5.6% to 8.5% from the first half of 2017 to the first half of 2020, India Ratings said.
The COTE ratio for all States combined stood at 13.5% in 1HFY24, highest since 1HFY17, it noted.
Close monitoring
Last month, Finance Minister Thangam Thennarasu had said in the Assembly that on the capex front, the State was aiming at just-in-time fund release so that surplus funds do not lie idle with the implementation agencies. The government is closely monitoring the progress of implementation of capital works as they are instrumental for spurring growth in the economy, he had said.
