Has India’s economy slowed down? This question raises further follow-up queries like, ‘Is it rural demand?’ or ‘Is it urban demand?’ The stock market indices are amplifying the anxiety. Then, there is the unravelling of a corporate scandal, timed perfectly to coincide with the Parliament session. Let’s dive into this. First things first: it was the Government that had been driving demand all along. The budgeted expenditure of Rs.11.11 trillion for this year marked an increase of Rs.1 trillion over the previous year. The financial year began just as the elections heated up, with the Government fully immersed in election campaigning. The second quarter was impacted by the monsoon and rising input costs, which hurt profit margins. The Government has lagged in its capex spending, having utilised Rs.4.15 trillion ($ 49.18 billion) during April-September 2024, accounting for only 37 per cent of the annual target of Rs.11.11 trillion for FY2024-25. This figure is lower than the Rs.4.9 trillion spent during the same period in the previous fiscal year. The Economic Affairs Secretary has expressed confidence that although the capex target may fall short by Rs.55,500 crore, the Government is on track to achieve spending of Rs.10.55 trillion, compared to the previous year’s Rs.9.48 trillion. Data from 15 major states indicates that their combined capex will need to grow by 40 per cent in the second half to meet the fiscal year’s budgeted target. For the Central Government, capex needs to grow by 52 per cent, which seems unlikely.The Government must race to meet its capex targets in the coming months. The Ministry of Roads, Transport & Highways (MoRTH) is set to award 8,000 km of road projects in FY25, a notable decline compared to previous years. Between FY22 and FY23, MoRTH awarded an average of 12,500 km of projects annually, but this dropped to 8,581 km last fiscal and is expected to remain modest at 8,000 km this fiscal, according to a Crisil report. Union Minister Nitin Gadkari is determined to reverse this trend. He has assured that the ministry will approve another set of projects in the pipeline, taking the total cost of projects cleared to Rs.2 lakh crore by December-end. In the current fiscal, the ministry is targeting the construction of 10,421 km of highways, which is 15 per cent lower than last year. For 2024-25, the ministry’s capital expenditure target is Rs.2.72 lakh crore, just 2.9 per cent higher than the previous fiscal’s achievement. The Maharashtra elections have disrupted government machinery, but it is hoped that the ruling party’s victory will encourage the rollout of tenders, as the mandate is for development. Central public-sector enterprises (CPSEs) and other agencies with annual capex targets of Rs.100 crore and above have a combined target of Rs.7.8 lakh crore for FY25. However, these corporations have invested only Rs.3.38 lakh crore during April-September FY25, compared to Rs.3.79 lakh crore in the same period last year. During this period, the Railways Board’s capex fell by over 19 per cent to Rs.1.16 lakh crore. The journey of development veers off course as soon as an election looms on the horizon. The riders become distracted and the pace slows down. Now that the obstacles have been cleared, during this critical period from December to March 2025, spending must shift from a trot to a gallop. Our forthcoming events in early 2025 include:3rd Metro Rail Conference on Jnuary 22, 2025 In MumbaiAI Powered Data Centres on February 12, 2025 in MumbaiCement Expo Forum on March 5-6, 2025 in Hyderabad Look for the ads in this issue and sign up for these opportunities for success in 2025!Follow me on twitter @PratapPadode