While some ministries have already started using up to 45-46% of their allotted funds for the year, others are lagging behind and will need to pick up the pace. According to official sources, PM Narendra Modi has ordered the move to increase spending during the first nine months of the fiscal year.
Most of the time, the finance ministry wants ministries to use two-thirds of the money they were given by the end of December, and the rest should be used between January and March. When the finance minister presents the revised estimates for the entire year, some of the better-performing ministries receive more funding, while lagging ministries frequently see their budgets cut.
The Centre's capital expenditures increased by 55% between April and June of this year, reaching approximately Rs 2.7 lakh crore, according to data provided by the finance ministry. More than 27% of the budget allocated for this purpose has already been utilized.
Focal public area endeavors are, nonetheless, seen to slack, having spent around a 10th of the interior and extra monetary assets (IEBR) for the year, notwithstanding a powerful 25% ascent in spending during the primary quarter of the monetary year.
Since the private sector has postponed its planned investment in creating new capacities or expanding existing plants due to lower demand in export markets and higher interest rates, it is thought that increased spending by the government and public sector undertakings is necessary to maintain growth momentum. The RBI believes that higher interest rates have impacted domestic demand, which has contributed to the delay.
The government will also be able to demonstrate its accomplishments by completing several of its projects in time for the elections by frontloading the expenditures.