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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.

·        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.

·        They are long investments of big amount of cash for acquiring long-run assets like producing instrumentation.

·        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.

·        In essence, the expenditure that is completed for initiating current, also because the future economic profit, is really capital expenditure.

·        Examples of capital expenditures Purchase of mill and building.

·        Purchase of machine, furniture, motor vehicle, workplace instrumentation etc.

·        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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