Manipur has achieved the target set by the Union Finance Ministry for Capital Expenditure (CAPEX) in the first quarter of the current financial year 2021-22.
According to the Finance Ministry, Manipur is one of the 11 states to meet this target. The other 10 states that achieved CAPEX are Andhra Pradesh, Bihar, Chhattisgarh, Haryana, Kerala, Madhya Pradesh, Meghalaya, Nagaland, Rajasthan and Uttarakhand. Thus, as an incentive, these states have been granted permission by the Department of Expenditure to borrow an additional amount of Rs 15,721 crore.
The additional open market borrowing permission granted is equivalent to 0.25 per cent of their Gross State Domestic Product (GSDP), which is Rs. 90 crore for Manipur.
Additional financial resources thus made available will help the States in pushing their capital expenditure further.
Capital expenditure is part of government spending that goes into creation of assets, investments that yield profits. It has a high multiplier effect, enhances the future productive capacity of the economy and results in a higher rate of economic growth.
Speaking to the Imphal Free Press, Neilenthang Telien, Joint secretary finance, viewed the achievement as a significant development for the state.
“Open market borrowing is a very limited option which is given under strict guidelines. To get permission for mobilizing additional borrowing means additional resources for the state when the economy is affected by the Covid pandemic. This will help boost the economy”, he said.
The joint secretary observed that this could be an outcome of the state’s significant expenditure on key sectors like water supply, connectivity among others.
It is informed that to become eligible for incremental borrowing, States were required to achieve at least 15 percent of the target set for 2021-22 by the end of 1st quarter of 2021-22, 45 percent by the end of 2nd quarter, 70 percent by the end of 3rd quarter and 100 percent by 31st March 2022. Next review of Capital expenditure of States will be undertaken by the Department of Expenditure in December, 2021.
In this round, capital expenditure achieved by the States till 30th September, 2021 will be assessed.