CAPITAL EXPENDITURE

CAPITAL EXPENDITURE

Subject: Economics

Context:  To support the economy battered by sporadic state specific lockdowns, the government is currently focussed on effective implementation of the Budget proposals as they have a lot stimulus already built into them, two senior government officials said.

Concept:

• While the Central government has announced steps to ease imports of oxygen as well as related medical equipment, and extended the emergency credit line facility to stressed companies, another round of economic package is yet to be discussed.
• Sources said the idea is to get the capital expenditure going and explore the possibility of any fresh economic package later on, depending upon how the economic situation evolves.
• In the 2021-22 Budget Estimates (BE), capital expenditure has been pegged atRs 5.54 lakh crore, a rise of 34.5 per cent over the 2020-21 BE of Rs 4.12 lakh crore and 26.2 per cent increase over FY21 Revised Estimates (RE) of Rs 4.39 lakh crore.

Capital Expenditure

• There are the expenditures of the government that result in the creation of physical or financial assets, or depletion in financial liabilities.
• This incorporates expenditure on the investment of building, land, equipment, machinery, investment in shares, and loans and advances by the central government to state and union territory governments, Public Sector Undertakings (PSUs), and other parties.
• They are irregular, non-recurring and long term expenditure.