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T.N.’s capex push bolsters growth hopes

The higher-than-budgeted capital expenditure undertaken in Tamil Nadu over 2020-21, is a ‘surprising’ positive that will boost the State’s medium-to-long-term growth prospects, India Ratings and Research has said in a report. Generally, State governments rein in capital expenditure when revenues are stressed.

Ahead of the assembly elections, the Tamil Nadu government presented a vote on account for FY22 and a full budget is expected to be presented by the newly elected government.

Revised estimates for capital expenditure this year are 8.72% higher than original Budget estimates and 58.65% higher than that incurred in 2019-20, Fitch Group-owned research firm Ind-Ra pointed out. “India Ratings (Ind-Ra) believes an increase in the capex would enhance the State’s productive capacity and hence be supportive of medium- to-long-term growth prospects of the state economy,” it said.

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