Budget 2016: Capital spending by states could slow in FY16
1. Budget 2016: Capital Spending By States
Could Slow In FY16
Growth in capital spending by states might slow in 2015-16 as compared to 2014-15,
according to a study by ICRA of nine state Budget News.
For 2015-16, capital spending was budgeted to grow at a slower 15 per cent as compared
to roughly 26 per cent in 2014-15 (revised estimates). Given the large variance between revised
estimates and audited state accounts, the gap might be lower.
Read our full coverage on Budget 2016
The fiscal space for boosting capital spending in India Budget News 2016-17 at the state
level might be further constrained in the coming year because of two reasons: The expected pay
revisions of state employees in line with the Seventh Pay Commission's award and states taking
over the accumulated debt of power distribution companies (discoms) under the central
government's UDAY scheme, which would lower the funds available for capital expenditure.