Continuing the government push to create public infrastructure, Finance Minister Nirmala Sitharaman today announced an allocation of ₹11.11 lakh crore towards capital expenditure in 2024-25. The allocation is up 11.1% from the budget estimate of ₹10 lakh crore for the current financial year. The allocation for FY25 is 3.4% of GDP.
"Building on the massive tripling of capital expenditure in the last four years, leading to multiplier impact, the outlay for the next year is being increased by 11.1% to ₹11,11,111 crore. This would be 3.4% of our GDP," Nirmala Sitharaman says in the budget speech.
"Three major economic corridors of the railways will be implemented. These are energy mineral and cement corridors. And high traffic density corridors," FM added.
"The announcement of 3 corridors for boosting multimodal transport and improving speed and safety of passenger transport is welcome. The development of new ports and airports will receive a fillip as last mile connectivity has been a long-standing issue," says Aakanksha Joshi, partner (Infrastructure), at Economic Laws Practice.
The finance minister also announced the creation of a corpus of ₹1 lakh crore with 50-year interest-free loan. This is aimed at long-term financing and refinancing with very low or zero interest rates to encourage the private sector to scale up research and development in sunrise sectors. A new scheme will be launched in the defence tech sector.
"Indian economy witnessed profound positive transitions in the last ten years. People are looking ahead with hope and optimism. Structural programmes have been undertaken. Economy has got a new vigour," Finance Minister Sitharaman says.
Ahead of the budget, industry expected the government to maintain the trend on capital expenditure which started in the wake of the Covid-19 pandemic in order to provide a fillip to the economy when the other engines of the economy were virtually silent as an impact of the pandemic.
"India is at an important inflection point and given the current global developments and associated headwinds, the government should continue to lay major thrust on public capital expenditure (on physical, social and digital infrastructure) in the forthcoming budget," Ficci said in its pre-budget expectations.
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