NEW DELHI: Capital spending rose sharply in the first quarter of the current fiscal with the Narendra Modi-led NDA government looking to turn around the investment cycle and lift growth through higher public spending. The 38% rise in capex spending in the first quarter is part of the government’s big plan to spur growth as private sector still remains reluctant with interest rates still remaining high. “This will have a strong multiplier effect on growth,” minister of state for finance Jayant Sinha said on Friday. Total capital spending in the first quarter was Rs 31,051 crore. The Reserve Bank of India has cut repo rate by 75 basis points since January and analysts do not expect any change in the upcoming monetary policy review on August 4. Many analysts see the RBI behind the curve especially as its counterparts in Asia had opted for aggressive cuts to boost growth. The finance ministry has asked ministries to front load budget spending in line with the objective of higher public spending to support growth. Fiscal deficit for the first quarter was 51.6% of the budget estimate at Rs 2.86 lakh crore, lower than 56.1% at the same time last year. Total expenditure in the first three months was 24.2% of the budget estimate at Rs 4.3lakh crore, slightly ahead of 23% same time last year. Government’s plan spend was 24.7% of the budget estimate at Rs 1.14 lakh crore as against 19.4% in the same quarter last fiscal, indicating the emphasis on development spending. Non-plan spending was 24.1% of the budget estimate at Rs 3.16 lakh crore. Pick up in tax collections has reflected in the receipts with revenue receipts at 12.4% of the budget estimate as against 9.6% in first quarter last fiscal. In the last three financial years, the government was forced to squeeze spending to remain within budgeted fiscal deficit after revenues came in below estimates. The NDA government had in the budget stretched the fiscal consolidation roadmap by a year to set aside more funds for capital spending. The goal to contain fiscal deficit to 3% of GDP was pushed back by a year to 2017-18. Fiscal deficit in 2015-16 is pegged at 3.9% of GDP and the government is confident that it would be able to meet this target comfortably.