Economy
At
20%, CPSEs’ capex pace strong, yet below target
·
Capital expenditure by
massive central public-sector entities — firms and undertakings – rose by
nineteen per cent on year to Rs 3.1 lakh crore within the 1st eight months of
this financial year.
·
In April-November of
FY22, the railways was the largest capitalist by deploying capex of regarding
Rs 93,000 crore or forty eight per cent of its annual target of Rs 1.95 lakh
crore.
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Capital expenditures
Capital expenditures are those that make some liability/asset for the govt.
·
These embrace loans to
public enterprises, loans to States, Union Territories and foreign governments
and acquisition of valuables.
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They are long
investments of big amount of cash for acquiring long-run assets like producing
instrumentation.
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Such assets acquired
give incomegenerating worth over a amount of years.
·
Hence, the value of
such assets is recovered through year-by-year depreciation over the productive
life of the asset.
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In essence, the
expenditure that is completed for initiating current, also because the future
economic profit, is really capital expenditure.
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Examples of capital
expenditures Purchase of mill and building.
·
Purchase of machine,
furniture, motor vehicle, workplace instrumentation etc.
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Cost of goodwill,
trademarks, patents, copy right, patterns and styles. Expenditure on
installation of plant and machinery and different workplace equipment.
·
Additions or extension
of existing fixed assets. Structural improvement or alterations on fixed assets
that increase their life or earning capability.
·
For example: Conversion
of handloom to powerloom. Development expenses just in case of mines and
plantations.
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