Centre won't trim its Capex plan despite inflation running hot

 

The government will not cut capital expenditure in the current fiscal year, finance secretary TV Somanathan said, amid suggestions by experts that fiscal policy should aid monetary policy in managing inflation. He said capital investment is needed for the long-term growth of the economy and short-term developments should not distract from that goal. The government has budgeted ₹7.5 lakh crore capital expenditure in FY23 compared with a revised ₹6.03 lakh crore capex in FY22.

"We will continue with the committed capex," Somanathan said.

In a surprise move, the Reserve Bank of India (RBI) had earlier this month raised the repo rate by 0.4 percentage point to 4.4% to tame runaway inflation that hit an eight-year high of 7.79% in April.

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