UK Infrastructure Spending Jumps 52% in FY26
- The Indian government reiterated on Tuesday its confidence in achieving the 4.4% fiscal deficit target for the financial year 2025-26 (FY26). Following this, the government plans to...
- Recent data from the Controller General of Accounts (CGA) reveals strong capital expenditure (capex) performance in the first half of FY26 (April-September).
- A ample portion of the capex surge is attributed to a disbursement of ₹500 billion (approximately $6 billion USD as of November 5, 2024) to the...
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India Confident in FY26 fiscal Deficit Target, Shifts Focus to Debt Reduction
The Indian government reiterated on Tuesday its confidence in achieving the 4.4% fiscal deficit target for the financial year 2025-26 (FY26). Following this, the government plans to prioritize reducing the country’s debt-to-GDP ratio starting in the subsequent financial year.
Capital Expenditure Exceeds Expectations
Recent data from the Controller General of Accounts (CGA) reveals strong capital expenditure (capex) performance in the first half of FY26 (April-September). Overall capex reached 52% of the Budget Estimates (BE).The Ministries of Road Transport and Highways and Railways significantly outpaced the national average, spending 63% and 57% of their respective budget allocations, respectively. Livemint reported on the CGA data.
| Ministry | Capex Spending (% of BE – H1 FY26) |
|---|---|
| Road Transport & Highways | 63% |
| Railways | 57% |
| Total (All Ministries) | 52% |
Capex Spending as a Percentage of Budget Estimates (H1 FY26). Source: Livemint, citing CGA data.
A ample portion of the capex surge is attributed to a disbursement of ₹500 billion (approximately $6 billion USD as of November 5, 2024) to the Department of Food and Public Distribution, against an initial budget allocation of ₹20 crore (approximately $2.4 million USD). Excluding this exceptional allocation, the increase in total government capex still stands at a significant 47.3% of the BE for FY26.
Debt-to-GDP ratio: The Next Frontier
While maintaining fiscal discipline remains a priority, the government’s shift in focus towards reducing the debt-to-GDP ratio signals a longer-term commitment to fiscal sustainability. Currently, India’s debt-to-GDP ratio is estimated to be around 81.8% as of March 2024, according to the Reserve Bank of India’s Annual Report 2023-24. Reducing this ratio is crucial for enhancing investor confidence and ensuring long-term economic stability.