The Interim Budget from February set India’s FY25 capital expenditure at Rs 11.11 lakh crore, which Finance Minister Nirmala Sitharaman maintained on Tuesday.
This is more than the revised estimate of Rs 9.5 lakh crore from the previous year.
According to the Finance Minister, the government will ultimately spend 3.4% of the budget on capital expenditures (capex), which is nearly twice as much as it did five years ago and 3.2% of the budget this year.
The government spent 2.8 times as much on capital projects in FY24 as it did in FY20, totaling Rs 9.5 lakh crore, a YoY increase of 28.2%.
According to the Economic Survey, private enterprises increased their capital spending in the fiscal year that ended in March of this year as compared to FY23.
The increasing proportion of Gross Fixed Capital Formation (GFCF) to nominal GDP suggests that GFCF is still a significant economic engine.
The government’s emphasis on capital expenditures has been a vital factor in propelling economic expansion amidst an unpredictable and demanding worldwide milieu. Capital expenditures have been broadly focused. Public capital expenditures have also started to stifle private investment.
