The Business Bytes
New Delhi, July 23, 2024 (TBB Bureau): Union Finance Minister Nirmala Sitharaman announced on Tuesday that India’s capital expenditure (capex) for the fiscal year 2025 will remain at Rs 11.11 lakh crore, as initially set in the Interim Budget presented in February.
This figure represents an increase from the previous year’s revised estimate of Rs 9.5 lakh crore. The Finance Minister noted that the government plans to allocate 3.4% of the budget to capex, up from 3.2% last year, and nearly double the expenditure from five years ago.
For the fiscal year 2024, the government’s capex was Rs 9.5 lakh crore, marking a 28.2 per cent year-on-year increase and 2.8 times the level of fiscal year 2020.
According to the Economic Survey, capital expenditure by private companies has increased in the financial year ending March, compared to FY23. The Gross Fixed Capital Formation (GFCF) has also continued to play a significant role in driving growth, as indicated by its growing share of nominal GDP.
The government’s emphasis on capex has been a crucial factor in fostering economic growth amid a challenging and uncertain global environment. This focus on capex has been broad-based, encouraging private investment alongside government spending.
