• UGI USER
  • Jul 18, 2024
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DECLINE IN GOVERNMENT CAPEX

Why in the news?

“Election cycles cause 70% drop in government project investments; private sector offsets decline with 22.5% growth.”

source:slideshare

Key points: Capital expenditure (capex)

  • Capital expenditure involves spending on machinery, equipment, buildings, and infrastructure.
  • It includes investments in fixed assets like land for future benefits.
  • Capex includes funds used to purchase new machinery, equipment, buildings, and intangible assets like patents.
  • Money spent on enhancing or modernising existing infrastructure or equipment.
  • Loan Repayment: Capex can also involve using funds to repay loans taken for capital projects.
What is Effective Capital Expenditure?

  • Capital Expenditure: Budgeted spending by the government on fixed assets.
  • Grants-in-Aid: Funds given to states/agencies for capital asset creation.
  • Effective Capital Expenditure: Sum of capital expenditure and grants for asset creation, reflecting total public investment.

Associated Article:

https://universalinstitutions.com/fy24-new-private-investments-dip-15-states-lead-capex-rise/