This budget was huge on capital expenditure (capex). Or, was it? Our post-budget week, beyond-the-headlinenumbers analysis shows, there is more to it than meets the eye.

Three takeaways

• The 24.5% step-up in central government capex for the next fiscal as presented on February 1, is not as large as it seems, if one considers the ‘offset’ through a reduction in internal and extra budgetary resources (IEBR), which fund capex of central public sectorenterprises (CPSEs)
  
• That said, capex support for the states has increased and employment generating sectors such as roads and highways, and railways, have gained more attention
  
• Implementation and frontloading of capex can make or break actual outcomes
  

First, a few caveats

• Direct capex, i.e., budgetary allocations to ministries
• Grants for creation of capital assets¹
  
• IEBR, which is a below-the-line expenditure that does not impact the central government’s fiscal deficit
  

¹The FRBM Act defines grants for creation of capital assets as grants-in-aid given by the Central Government to state governments, autonomous bodies, local bodies and other scheme implementing agencies for creation of capital assets which are owned by these entities.