Budget 2024: A capital expenditure, or capex, is used to set up long-term physical or fixed assets
Finance minister Nirmala Sitharaman, in her interim budget speech on Thursday that the capital expenditure for the financial year 2024–25 has been raised by 11 percent to ₹11.11 lakh crore, or 3.4 percent of GDP.
The minister said the tripling of capex in the last four years has resulted in a multiplier effect on economic growth and employment generation. Budget 2024 LIVE coverage “The scheme of a fifty-year interest-free loan for capital expenditure to states will be continued this year with a total outlay of ₹1.3 lakh crore,” Sitharaman added in her budget address.
A capital expenditure, or capex, is used to set up long-term physical or fixed assets. Last year, the government proposed increasing capital expenditure outlay by 33 percent to ₹10 lakh crore in 2023-24, estimated to be 3.3 percent of the GDP.
During her budget speech, Sitharaman said the government will present a ‘Viksit Bharat’ roadmap in July, expressing confidence in the Modi-led dispensation to return to power after the general elections.
“In the full budget in July, our government will present a detailed roadmap for our pursuit of ‘Viksit Bharat’. Revised estimates of 2023–24: The revised estimates of the total receipts other than borrowings ₹27. 56 lakh crore, of which the tax receipts are ₹23.24 lakh crore,” the minister said.
What experts said on Budget 2024?
Radhika Rao, senior economist at DBS Bank, Singapore, said, “The budget delivered on the consolidation and capex theme by not only expecting the FY24 deficit to fare better than budgeted but also pegging the FY25 goalpost at a narrower-than-expected (level of) 5.1% of GDP. By extension, gross and net borrowings are much lower than FY24, providing significant relief to the domestic debt markets.”
Garima Kapoor, economist at Elara Capital, Mumbai, said, “The budget lacks consumption triggers. Thus, is a departure from the previous pre-election vote on accounts. The market will have to re-align to the new reality of lower growth in capex hereon as the FY26 fiscal deficit target is the priority.”
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