Definition
Capital Outlay
Capital outlay is the portion of government spending used directly to acquire or build physical and financial assets, the core of capital expenditure.
Within the Budget's capital account, capital outlay refers to actual asset creation — building highways, laying track, constructing buildings — as distinct from capital expenditure that merely repays loans or extends loans to others. It is the most growth-relevant slice of public investment.
When commentators highlight the government's infrastructure ambitions, they usually point to the rise in effective capital outlay. Loans to states for capex are sometimes added to the Centre's own outlay to arrive at an 'effective' figure that captures the full public investment thrust.
Related terms
- Revenue vs Capital ExpenditureRevenue expenditure covers the government's recurring running costs, while capital expenditure creates lasting assets or reduces liabilities.
- Capex PushA capex push is a deliberate budgetary strategy of sharply increasing government capital expenditure on infrastructure to spur growth and attract private investment.
- 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.