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L&T CFO Eyes 10% CapEx Hike for FY27 Budget
4 Jan
Summary
- L&T CFO anticipates a 10% capital expenditure increase in the FY27 budget.
- Government spending is seen as crucial for India's developed economy goal.
- Manpower shortages and project execution delays remain significant challenges.
R. Shankar Raman, the Chief Financial Officer of Larsen & Toubro, anticipates a significant 10% increase in capital expenditure outgo for the forthcoming FY27 budget. This projection underscores the government's commitment to infrastructure development, deemed essential for India's ambition to achieve developed economy status by 2047. Raman expressed confidence that ample liquidity in the financial system will support such substantial public investments, mitigating fears of resource crowding out.
The CFO highlighted the positive trajectory of large infrastructure projects and expressed hope for continued robust government allocation, similar to the over Rs 11 lakh crore commitment in FY26. He noted that while the government recommends qualitative pricing mechanisms, challenges persist with manpower shortages, impacting project execution. The pandemic has also influenced workforce mobility, making it harder to attract labor for distant projects.
Raman suggested that bringing projects closer to residential areas could alleviate manpower issues, a strategy he believes the government is pursuing. He also commented on the active private capital expenditure across various sectors, welcoming the government's inclusive approach to budget-making through industry consultation. This collaborative process signifies a mature governance system, fostering growth and development.
