In that respect, bounces from higher investment in road transport and highways, railways, defence services, and telecommunications were strong and durable on Monday, the Economic Survey said, adding that all this investment would help deal with logistical challenges and raise production capacities.
Government capital expenditure at ₹9.5 lakh crore for FY24 was 28.2 percent higher than the preceding year and 2.8 times of that in FY20. It has also found that capital spending by private companies has increased in the financial year closing in March from FY23. The Survey reiterated that GFCF is one of the principal drivers of growth and mirrored it in its rising share in nominal GDP. Capital expenditure by the government has been the ventilator for economic progress, more so in times of global uncertainty and volatility.
It has been an all-inclusive strategy on capital expenditure. The government expenditure crowded in private investment and, with grants-in-aid to states for capital asset creation, elicited greater productive expenditure at the states' level. The Survey recommended that the government work out a policy and regulatory environment to support developing the capacity and capability of component manufacturers, availability of skilled labor, and mitigate resource and regulatory constraints.
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