Anticipate govt to go for 10 pc capex growth in budget: L&T CFO

Mumbai, Jan 4 (PTI) Larsen and Toubro’s Chief Financial Officer R Shankar Raman expects a ten per cent increase in capital expenditure outlay in the upcoming budget for FY27.

Amid concerns that growth in private capital spending will slow, Raman said he was not afraid of “depleting” resources due to high government spending. Abundant liquidity in the system will support such investments.

“If India is to become a developed economy by 2047, infrastructure has a lot of role to play and I think the government has seized on that. I hope they will allocate adequate resources in the budget to be able to do that,” Raman told PTI recently.

indicating extreme ₹Raman, who has committed Rs 11 lakh crore for capital expenditure in the FY26 budget, said the new document to be presented by Finance Minister Nirmala Sitharaman in a few weeks will continue in the same vein.

“They’ll probably go for a 10 percent increase… that’s my expectation, but that’s on a personal level,” he said.

Raman said that there has already been a leap forward in the way major infrastructure projects are being designed, and emphasized that “infrastructure has a long way to go.”

However, he said that sometimes projects are handed over to the lowest bidders who are not the best technically equipped, leading to delays in implementation.

Raman said the government has suggested all departments to adopt an “attribute-based pricing mechanism” where emphasis is given to timely completion of a project and other aspects as well.

He added that as long as the “balance” between the price of a bid and other considerations, such as the business’s ability to complete on time, is followed, good companies will bag contracts.

Asked about the manpower shortage that the country’s largest engineering, procurement and construction company has been flagging for some time, Raman said challenges remain.

He added that the availability of alternatives has made construction a less desirable profession and moreover, with the government promising up to 125 days of employment, people are thinking twice before uprooting themselves from their hometowns.

Raman said that the pandemic has changed the mindset of people as they do not have difficulty reaching homes in times of crisis after the lockdowns, which has led to some change in thinking.

“The best antidote to this would be to move projects closer to residences, which means you have to go deeper into the country, I think that’s what the government is doing, that’s what we’re all trying to do,” the CFO said. he said.

On the private capital expenditure front, he said companies in sectors such as automobiles, construction equipment, steel, minerals and metals, semiconductors and electronics are currently investing.

He welcomed the government’s openness to discussing suggestions from the industry and all key stakeholders in the budget-making process, describing it as a sign of a mature management system.