In the 12 Budgets presented during the 10 years of Narendra Modi’s tenure as PM, the one number that leaps out is Nirmala Sitharaman’s capital spending allocation of Rs 11,11,111 crore for the next fiscal — an 11.1% increase over the current year’s budget estimate.
Sitharaman, presenting her sixth Budget, used what is considered an auspicious number — one — to earmark funds that will be used to build roads, railways and other assets.
While the proposed growth rate appeared meagre compared to what Sitharaman has been targeting — 25% in FY23, followed by 35% in FY24 — the minister asserted that the increase comes on a larger base. During her watch, the Centre’s capex has risen 3.3 times from Rs 3.4 lakh crore in 2019-20.
The FM argued that the rise in capex comes amid signs that private sector investment has begun to flow. “One has to have a clear understanding that when the govt wants to spend through capital investment, it can be the one for triggering the economy so that the private sector comes in. At a time when private sector didn’t come in, we fully came in,” Sitharaman told reporters.
A high capex is seen to be one of the triggers for a strong recovery of the Indian economy post-Covid, especially at a time when overseas demand has remained muted, first in the wake of high inflation and interest rates in Europe and the US and then due to geopolitical tensions in Ukraine and West Asia.
Next year, over 47% of the capex is accounted for by road transport and highways, and railways, the two main transport ministries. While road transport and highways has been allocated over Rs 2.7 lakh crore, funds earmarked for capital spending by railways is pegged at over Rs 2.5 lakh crore.
In addition, the govt is also earmarking Rs 1.3 lakh crore as assistance to states for capital expenditure. The initiative was announced post-Covid aimed at boosting productive investment by states.
Sitharaman, presenting her sixth Budget, used what is considered an auspicious number — one — to earmark funds that will be used to build roads, railways and other assets.
While the proposed growth rate appeared meagre compared to what Sitharaman has been targeting — 25% in FY23, followed by 35% in FY24 — the minister asserted that the increase comes on a larger base. During her watch, the Centre’s capex has risen 3.3 times from Rs 3.4 lakh crore in 2019-20.
The FM argued that the rise in capex comes amid signs that private sector investment has begun to flow. “One has to have a clear understanding that when the govt wants to spend through capital investment, it can be the one for triggering the economy so that the private sector comes in. At a time when private sector didn’t come in, we fully came in,” Sitharaman told reporters.
A high capex is seen to be one of the triggers for a strong recovery of the Indian economy post-Covid, especially at a time when overseas demand has remained muted, first in the wake of high inflation and interest rates in Europe and the US and then due to geopolitical tensions in Ukraine and West Asia.
Next year, over 47% of the capex is accounted for by road transport and highways, and railways, the two main transport ministries. While road transport and highways has been allocated over Rs 2.7 lakh crore, funds earmarked for capital spending by railways is pegged at over Rs 2.5 lakh crore.
In addition, the govt is also earmarking Rs 1.3 lakh crore as assistance to states for capital expenditure. The initiative was announced post-Covid aimed at boosting productive investment by states.
