Union Finance Minister Nirmala Sitharaman announced on Tuesday that the capital expenditure of India would remain at Rs 11.11 lakh crore for FY25—this is the same amount as that stipulated in the Interim Budget presented in February this year. This is up against last year's revised estimate of Rs 9.5 lakh crore. He added that the Government's spending on capex will make up 3.4 per cent of the Budget, up from 3.2 per cent last year and almost twice the proportion spent five years ago.
For FY24, the government's capex has reached Rs 9.5 lakh crore, which is up 28.2% year-on-year and 2.8 times than FY20. According to the Economic Survey, the capital expenditure of the private sector has also gone up in the financial year to March compared with FY23.
GFCF remains a main driver of growth, reflected by its gradually rising share in nominal GDP. Against the hugely challenging global backdrop, the government interest in capital expenditure has become critical for economic growth. The investment strategy has been holistic and has started to get private investment traction.
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