Government announces record capital expenditure of Rs 11.11 lakh crore

Interim Budget: The government has announced a record-breaking capital expenditure (capex) of Rs 11.11 lakh crore for infrastructure development in the fiscal year 2024-25. Finance Minister Nirmala Sitharaman revealed this substantial 11.1 per cent increase in capex compared to the current fiscal year during her budget speech on Thursday.

The government's commitment to capital expenditure, expressed as a percentage of GDP, is anticipated to reach 3.4 per cent in the upcoming financial year, slightly up from the 3.3 per cent recorded in 2023-24. While the year-on-year increase is lower than the current fiscal year, the government has strategically allocated Rs 1.3 lakh crore for 50-year loans to states, aimed at bolstering their capital investments.

To finance these ambitious plans, the government plans to raise Rs 14.13 lakh crore from the market by issuing dated securities in 2024-25. Finance Minister Sitharaman highlighted the positive impact of GST in reducing the compliance burden, with the average monthly GST collection doubling to Rs 1.66 lakh crore.

This substantial market borrowing is a strategic move by the government to bridge the fiscal deficit, which arises from the gap between expenditure and revenue. In the current financial year up to July 31, 2023, the government successfully mobilized a gross amount of Rs 5.77 lakh crore through the issuance of dated securities.

Overall, the increased focus on infrastructure development, coupled with strategic financial measures, underscores the government's commitment to propelling India's economic growth in the coming fiscal year.