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In response to incoming private capex, she told Parliament that in order to address the twin balance-sheet problem, the government had implemented schemes such as the asset monetisation pipeline, PM Gati Shakti and PLI, which are attracting investors to manufacturing.
Sitharaman credited the favourable policy regime and highlighted research and announcements in the media since the beginning of the fiscal for the rise in private capex announcements.
ICRA’s research on key industry sectors showing healthy capex in April 2022 mentioned the Rs 12,886 crore capacity expansion plan by Ultratech Cement Ltd. and the Rs 10,000 crore M&M Ltd. EV plant in Pune.
“Private capex announcements are up by 35% year-over-year and 53% above pre-Covid levels,” Sitharaman said.
The PLI scheme in 14 sectors has seen a robust response as well, she said.
However, the call to investment continues. The Finance Minister has often asked the private sector to increase their investments at industry events, even likening them once to the mythological character of Hanuman and saying that they are unaware of their investing potential.
“Private final consumption expenditure stood at 58.45% in Q2, which is the highest among all second quarters since 2013-14,” she said. “Exports have been buoyant at 23.3% of the GDP in Q2, the highest in all second quarters since 2016.”
According to her, the contact-intensive sectors had completely recovered from the pre-pandemic gross addition levels in the second quarter.
Answering a question on the government’s capability to raise additional capital to fund the SDGs, Sitharaman said that between April and October of the current fiscal, the government’s gross tax receipts showed an 18% YoY growth, whereas the current budget growth over last year’s revised estimates is 9.6%.
The buoyancy gives the government the confidence to fund the SDG, she said.
The government has not changed its borrowing calendar, indicating that no new funds will be needed to fund the excess, Sitharaman said.
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