The government has maintained capital expenditure at Rs 11.11 lakh crore.
All eyes were on capital expenditure in Budget 2024. It was expected that there would be an increase of around Rs 2-3 lakh crore over the capital expenditure provision made by the government in the interim budget. But this was not seen at all in the budget. Finance Minister Nirmala Sitharaman retained the budget of Rs 11.11 lakh crore for capital expenditure in the financial year 2024-25. The government made it clear in the budget that it will take steps to promote private investment in basic infrastructure. Under this, Viability Gap Financing (VGF) will be initiated to make the project practical.
Capex did not increase
Presenting the Union Budget for the fiscal year 2024-25, the Minister said that the government will strive to maintain strong fiscal support for infrastructure over the next five years, along with other fiscal consolidation priorities and imperatives. Sitharaman said that this year I have made available Rs 11,11,111 crore for capital expenditure. This is 3.4 per cent of our gross domestic product. The Finance Minister said that the Central Government will encourage states to provide support for infrastructure as part of their development priorities.
Emphasis on private investment
The government will also work on a new framework to encourage private investment in infrastructure. A day earlier, the Economic Survey had reported that despite the government’s push for capital investment, private investment in basic infrastructure has not reached the desired level. The Finance Minister said that investment in basic infrastructure by the private sector will be promoted through viability gap financing and enabling policies and regulations. A market-based financing framework will be introduced.
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emphasis given here
The budget also announced the launch of the fourth phase of Pradhan Mantri Gram Sadak Yojana in 25 rural villages and provision of assistance to Assam for flood management and related projects. Sitharaman said the significant investment that the central government has made in recent years in building and upgrading basic infrastructure has had a strong impact on the economy. There was moderate growth in railways, road transport and highways, and emphasis was placed on housing. Allocations for key central ministries remained unchanged from the interim budget. But the infrastructure push given to Bihar, Andhra Pradesh and Odisha has ensured continued capital expenditure for the central government.
This ministry has the highest budget.
On the other hand, there has been no change in the budget of the ministries. According to the data, the effective capital expenditure for the financial year is Rs 15 trillion, which includes grants of around Rs 3.9 trillion to states for construction of basic infrastructure. The Ministry of Road Transport and Highways has received the highest capital allocation of Rs 2.72 trillion. Which is 3 per cent higher than the revised estimate for 2023-24. The ministry will also consider monetising roads worth around Rs 30,000 crore and plans to allocate 12,000 kilometres of national highways.
