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Article: The article discusses trends in public investments
Important facts:
- Types of public investments:
- Central government expenditure
- State government expenditure
- Internal and Extra Budgetary Resources (IEBR): constitutes the resources raised by the PSUs through profits, loans and equity.
Trends:
- Fixed investments grew 12.3% on average in real terms in the last three quarters of the current financial year
- Overall investment ratio (share of gross fixed capital formation in GDP) rose to 31.4% in fiscal 2018 from 31.1% in FY 2017 and 30.3% in FY 2016
- The share of the government’s investment in GDP rose from 3.5% in FY2012 to 4.2% in 2017.
- Centre’s role in capital spending has been low and declining while states and IEBR of PSUs have been largely funding public investments.
- share of states in capital expenditure (CAPEX) has risen from 32.6% in FY2010 to 43.4% in FY2018.
- Uttar Pradesh, Bihar, Karnataka, Telangana, and Maharashtra — accounted for about 50% of the capex of the states for fiscal years 2016 and 2017
Note: Capex at the state level is defined as the sum of capital outlay, and loans and advances.
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