New Delhi: The Narendra Modi government’s capital expenditure budget saw just a modest annual growth of 7% from 2015-16 to 2018-19 even as it raised additional revenue of nearly Rs 5 lakh crore from the petroleum sector via customs and excise duty alone.This means, to put it simply, extra revenue is being spent by the government to meet its routine expenses and not for creation of assets like roads, bridges, ports and airports which could unleash the economy’s long-term growth potential and create much-needed jobs for the country’s expanding workforce.The global crude oil market started cooling since mid-2014 from its astronomically high levels. The Modi government that came to power in May that year took advantage of low oil prices to raise duty on petrol and diesel and fill its coffers.When asked about this, senior government officials have pointed out that the increased revenue had gone towards capex spending, in “building more roads and providing irrigation and drinking water facilities.”Trend in Centre’s capital expenditureFYExpenditure (Rs crore)% increase2015-162,37,7182016-172,61,4169.92017-182,73,4454.62018-192,91,944 (BE)6.7Average- 7.06%Source: Union budgets, (BE- budget estimates)The NDA government hiked excise duty on auto fuels nine times in 2014-15 and 2015-16. Excise duty on petrol and diesel was Rs 9.48 and Rs 3.56 a litre respectively before the NDA government took office. However, through repeated hikes, it jacked up duty to Rs 21.48 and Rs 17.33 a litre, an increase of 226% and 486% respectively over the May 2014 level.It collected from the petroleum sector Rs 2.13 lakh crore in 2015-16, Rs 3 lakh crore in 2016-17 and nearly Rs 3.07 lakh crore in 2017-18 as customs and excise duty.It has strongly resisted calls for slashing excise duty on petrol, diesel despite hefty hikes in prices made by the state-owned oil marketing companies (OMCs) to keep pace with the crude rally in the international market.Centre’s excise, customs duty collections from petroleum sectorFinancial YearMop up (Rs crore)2011-1295,2292012-1398,6032013-141,04,1632014-151,22,9262015-162,13,9952016-173,00,2952017-18 (April-December)2,30,807Source: Petroleum ministryIt made a one-time reduction of Rs 2 a litre on petrol, diesel last October but has made up for the loss by hiking road cess on petrol and diesel cess in 2018-19 Union budget.Petrol was selling at Rs 77.83 a litre in Delhi on Friday, up more than 11% from its level of Rs 69.97 a litre on January 1 this year.Petrol rates have risen by nearly 4% since the OMCs resumed their daily price revision on May 14 after a gap of 19 days – when it was kept on hold due to campaigning for Karnataka elections. The government actually cut allocated capital expenditure for 2017-18 by Rs 36,356 crore to Rs 2.73 lakh in order to accommodate higher revenue expenditure on account of increased salary costs.Trend in Centre’s revenue expenditureFYExpenditure (Rs crore)%increase2015-1615,47,6722016-1716,90,5849.22017-1819,44,305152018-1921,41,772 (BE)10.1Average- 11.43%Source: Union budgetsThe Modi government has justified the cut in capital expenditure, saying revenue expenditure on health and education is also important to raise productivity in the economy. It has decided to abandon the goal of revenue deficit targeting and focus on fiscal deficit targeting instead. That means the government will try to reduce the overall budget deficit, and not bother about whether the deficit is used to meet revenue or capital expenditure.Finance minister Arun Jaitley had set the government’s revenue deficit target for 2017-18 at 1.9% of GDP but it finally widened to 2.6%. The finance minister has set revenue deficit target for 2018-19 at a higher level of 2.2%, nearly the same level as achieved in 2016-17.Rating agencies like Crisil and Icra have raised concerns over the curtailed capital spending to cap fiscal deficit at 3.5% for 2017-18, and warned that the higher target for next fiscal will delay the fiscal consolidation process by three years.“It is the productive spending in the economy that has seen a compromise, making way for revenue spending,” Crisil said while commenting on the Union budget for 2018-19 .It added, “The more worrisome part is that the breach in fiscal deficit is despite a cut in capital expenditure,. That means that had government stuck to its targeted capex for fiscal 2018, the deficit would have been still higher.”Icra too expressed concern over the “sharp rise” in revenue deficit in 2017-18.