The Union Budget 2025 has allocated ₹11.21 lakh crore towards capital expenditure (capex), reinforcing the government’s commitment to infrastructure-driven growth.In Budget 2024, Finance Minister Nirmala Sitharaman had allocated ₹11.11 lakh crore for capex, maintaining the same level as the interim budget presented in February. This accounted for 3.4% of GDP.The revised estimate for FY24 placed capex at ₹9.50 lakh crore, lower than the previous estimate of ₹10 lakh crore. The revised FY23 capex stood at ₹7.28 lakh crore.
The government had also extended ₹1.5 lakh crore in interest-free loans to states to support infrastructure priorities. Additionally, private sector investment in infrastructure was encouraged through viability gap funding (VGF) and enabling policies.Ahead of Budget 2025, India Inc had sought a significant increase in capital expenditure to sustain economic momentum. Experts had called for a 15-20% rise in capex to stimulate domestic demand and maintain infrastructure growth.The focus remained on balancing fiscal prudence with growth-oriented spending, ensuring higher disposable income and stronger public-private investment.While Budget 2025 aligns with the government’s medium-term fiscal goals, analysts will closely watch its impact on economic growth, private sector participation, and fiscal deficit management.First Published: Feb 1, 2025 11:54 AM IST
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