Budget 2024: Government Set to Boost Infrastructure Investment for Economic Expansion

Anticipating the interim Budget for 2024-25, the government is poised to reinforce its earlier commitment, with expectations of a 10% surge in capital expenditure, reaching Rs 11 lakh crore. Officials express optimism regarding the resurgence of consumption and growth in the fiscal year 2025, highlighting the positive impact of capital expenditure in various states this year.

Official statistics reveal that the central government’s capital spending from April to September 2023 has already reached 49% of the targeted Rs 10 lakh crore for the fiscal year. September marked a significant milestone, with capital expenditure reaching Rs 1.16 lakh crore, representing the highest monthly spending in the fiscal year.

Key players in infrastructure, such as the National Highways Authority of India and Indian Railways, have increasingly relied on budget allocations over the years. Moreover, the government is likely to extend interest-free, long-term capital expenditure loans to states in FY25 to invigorate nationwide economic activity.

The success of the Special Assistance to States for Capital Investment 2023-24 is evident in the initiation of capital investment projects across various sectors, including health, education, irrigation, water supply, power, roads, and railways. This initiative has played a pivotal role in propelling India’s economic growth, given the higher multiplier effect of capital expenditure.

Out of the allocated Rs 1.30 lakh crore for 2023-24, the central government has already sanctioned over 70% to states in the initial seven months (April-October) of the current fiscal year. However, sources indicate that the government places a strong emphasis on vigilance in fund utilization and accountability, making it a primary focus for the Department of Expenditure this year.

In its pursuit of fiscal consolidation, the government aims for a 5.9% fiscal deficit for the current year and envisions achieving a fiscal deficit of 4.6% by 2026.

About Ravi Khanna

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