Union budget likely to continue CAPEX hike to boost investment
Union budget likely to continue CAPEX hike to boost investment

NEW DELHI: The impending Union budget is expected to focus on strengthening capital expenditure in 2023-24 too, as has been the case for the past several years. 

The Center is placing a large wager on public capital expenditure to drive the investment cycle and accelerate India's economic recovery in the post-pandemic period because it is bullish on economic growth and encouraged by positive comments from several international agencies, such as the World Bank and the International Monetary Fund, calling it a resilient economy.

The capital expenditure allocation in the preceding budget for 2022–23 was Rs 7.50 lakh crore, a 35.4% increase over 2021–22. The term "capital expenditure" refers to money spent on constructing assets like bridges, ports, buildings, etc.

Capital expenditures had already been hampered by pandemic-related restrictions that were in force in 2020–21 and 2021–22, according to the economic survey for 2021–22. However, as the pandemic-related restrictions were loosened in the second half of 2020–21, the momentum increased and persisted throughout 2021–22 as well.

Over the first three quarters of 2021–2022, the capital expenditure trend has risen. The capital expenditure increased by 13.5% Year-on-Year between April and November 2021, with a concentration on infrastructure-intensive industries like roads, trains, and housing and urban affairs. The 2021-22 Economic Survey noted that "this increase is particularly significant given the high YoY growth in capital spending observed during the equivalent period of the prior year as well."

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