Looking ahead to the upcoming interim Budget for 2024-25, the government is set to build on its previous commitment, with expectations of a 10% increase in capital expenditure, reaching Rs 11 lakh crore. Officials express confidence in the rebound of consumption and growth for the fiscal year 2025, emphasizing the positive utilization of capital expenditure in several states this year.
Official figures indicate that the central government's capital spending from April to September 2023 has already reached 49% of the targeted Rs 10 lakh crore for the fiscal year. September witnessed a notable milestone, with capital expenditure hitting Rs 1.16 lakh crore, marking the highest monthly spending in the fiscal year.
Infrastructure stalwarts like the National Highways Authority of India and Indian Railways have increasingly leaned on budget allocations over the years. Additionally, the government is likely to extend long-term interest-free capital expenditure loans to states in FY25 to stimulate economic activity on a national scale.
The success of the Special Assistance to States for Capital Investment 2023-24 is evident in the initiation of capital investment projects across various sectors, including health, education, irrigation, water supply, power, roads, and railways. This initiative has played a crucial role in propelling India's economic growth, given the higher multiplier effect of capital expenditure.
Out of the earmarked Rs 1.30 lakh crore for 2023-24, the central government has already sanctioned over 70% to states in the first seven months (April-October) of the current fiscal year. However, sources suggest that the government emphasizes vigilance in fund utilization and accountability, making it a key focus for the Department of Expenditure this year.
In its pursuit of fiscal consolidation, the government targets a 5.9% fiscal deficit for the current year and aspires to achieve a fiscal deficit of 4.6% by 2026.
Budget 2024: PLI Scheme's Evolution for Economic Empowerment
