Definition
Capex Push
A capex push is a deliberate budgetary strategy of sharply increasing government capital expenditure on infrastructure to spur growth and attract private investment.
In several recent Union Budgets, the government has prioritised a capex push, raising the effective capital outlay at a much faster pace than revenue spending. The logic is that infrastructure spending has a higher fiscal multiplier — each rupee generates more downstream economic activity than a rupee of subsidy.
The push includes both the Centre's own spending and large interest-free, long-tenure loans to states earmarked for capital projects. By front-loading public investment, the government hopes to crowd in private capex and sustain growth while keeping the quality of the fiscal deficit high.
Related terms
- Revenue vs Capital ExpenditureRevenue expenditure covers the government's recurring running costs, while capital expenditure creates lasting assets or reduces liabilities.
- Capital OutlayCapital outlay is the portion of government spending used directly to acquire or build physical and financial assets, the core of capital expenditure.
- Fiscal MultiplierThe fiscal multiplier measures how much total economic output rises for each rupee of additional government spending.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.