Centre & State Govts step up infra spending in 2nd quarter

To offset the adverse impact of Covid-19, Central and State governments have increased the pace of tendering and awarding new projects in the past few months. A major chunk of the investments went to the projects in roadways, real estate, community services, hospitals, irrigation, tourism and water supply treatment sectors. Project monitoring agency, Project Today, informed that in the September quarter, there was a 146% jump in infrastructure spending and project tenders by the states and a 67% increase in public and private sector tenders as compared to the June quarter, indicating an early sign of economic recovery. Building and construction activity data monitored by the organization indicated that fresh investment by state governments' agencies surged 146.3% in the second quarter. The Centre has also separately announced new projects entailing investments of ₹54,339 crore in the same quarter, a sequential increase of 93%. States, which account for more than half of all government-funded capital expenditure, have resorted to the deepest cuts in spending due to the pandemic. The improvement in Q2, although over a low base of Q1 when most of the country was languishing under a lockdown, shows that states are willing to return to invest in building physical infrastructure. Similarly, in Q2, the private sector announced 618 new projects worth ₹83,608 crore, recording sharp surge from 315 new projects worth ₹44,714.6 crore announced in the first quarter of the fiscal.