Finance minister Nirmala Sitharaman in her interim budget speech on Thursday announced that the capital expenditure for financial year 2024-25 has been raised by 11 per cent to ₹11.11 lakh crore, or 3.4 per cent of GDP.
The minister said the tripling of capex in the last four years has resulted in a multiplier effect on economic growth and employment generation.
Budget 2024 LIVE coverage
“The scheme of fifty-year interest free loan for capital expenditure to states will be continued this year with total outlay of ₹1.3 lakh crore,” Sitharaman added in her budget address.
A capital expenditure, or capex, is used to set up long-term physical or fixed assets. Last year, the government proposed to increase capital expenditure outlay by 33 per cent to ₹10 lakh crore in 2023-24, which was estimated to be 3.3 per cent of the GDP.
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During her budget speech, Sitharaman said that the government will present a ‘Viksit Bharat’ roadmap in July, expressing confidence in the Modi-led dispensation to return to power after the general elections.
{{/usCountry}}During her budget speech, Sitharaman said that the government will present a ‘Viksit Bharat’ roadmap in July, expressing confidence in the Modi-led dispensation to return to power after the general elections.
{{/usCountry}}“In the full Budget in July, our government will present a detailed roadmap for our pursuit of 'Viksit Bharat'. Revised estimates of 2023-24: The revised estimates of the total receipts other than borrowings ₹27. 56 lakh crore of which the tax receipts are ₹23.24 lakh crore,” the minister said.
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What experts said on Budget 2024?
Radhika Rao, senior economist, DBS Bank, Singapore, told Reuters,"The budget delivered on the consolidation and capex theme, by not only expecting the FY24 deficit to fare better than budgeted but also pegging the FY25 goalpost at a narrower-than-expected (level of) 5.1% of GDP. By extension, gross and net borrowings are much lower than FY24 providing significant relief to the domestic debt markets."
Garima Kapoor, economist, Elara Capital, Mumbai, said,"The budget lacks consumption triggers. Thus, is a departure from the previous pre-election vote on accounts. The market will have to re-align to the new reality of lower growth in capex hereon as FY26 fiscal deficit target is the priority."