The government will expand the scope of investment from FY28 to include asset modernization and engineering spending

Ranen Banerjee, Partner and Head of Economic Advisory, PwC India, said, “As per private sector accounting practices, when an asset is replaced or overhauled, such expenditure is capitalized and then depreciated over its useful life. Since government accounts are on a cash basis, expenditure is charged only in the year it is incurred and there is no depreciation to reflect actual depreciation, so it is actual depreciation to be however, depreciation over the life of the asset, retrofitting and major modernization should remain outside the investment basket with clear guidelines to avoid overvaluation.