Indian Government Announces Significant Capital Expenditure Increase for 2024-25

Union Finance Minister Nirmala Sitharaman announced an Rs 11.11 lakh crore capital expenditure outlay for 2024-25. This move aims to boost infrastructure and economic growth. The fiscal deficit target is set at 4.9% of GDP, with a long-term goal to reduce it below 4.5% by 2025-26.

The Indian government has maintained its focus on infrastructure development, announcing a capital expenditure outlay of Rs 11.11 lakh crore for the fiscal year 2024-25. This was revealed by Union Finance Minister Nirmala Sitharaman in an interim Budget, laid out ahead of the upcoming General elections.

Sitharaman emphasized the government's consistent investments in infrastructure, citing them as having a 'strong multiplier effect' on the economy. 'We will strive to maintain robust fiscal support for infrastructure over the next five years, while balancing other priorities and fiscal consolidation,' she stated.

The new capital expenditure represents 3.4% of GDP, marking an 11.11% increase from the previous year's budget of Rs 10 lakh crore, which was 3.3% of GDP. The substantial increase aims to boost growth and job creation, attract private investments, and shield the economy from global challenges.

In her budget speech, Sitharaman set a fiscal deficit target of 4.9% for 2024-25, down from 5.8% for the previous year. 'The fiscal consolidation path, announced in 2021, has served us well. We aim to bring the fiscal deficit below 4.5% by 2025-26,' she affirmed, committing to keep the government's debt on a declining path as a percentage of GDP from 2026-27 onwards.

(With inputs from agencies.)