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Interim budget 2024-25: Govt plans Rs 11.11 trillion capex for this year
Industry News- Feb 01,24
FM Nirmala Sitharaman proposed setting up of a corpus of Rs one trillion for India’s tech savvy youth. For railways, three major economic railway corridor programmes - energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors - will be implemented.
The Government of India will spend Rs 11.11 trillion as capital expenditure (capex) for the next financial year 2024-25, which would be 3.4 per cent of the GDP and 11.1 per cent more than the planned capex of Rs 10 trillion for FY24, said Nirmala Sitharaman, Union Finance Minister, while presenting the interim budget for FY25 today. “This is in the wake of building on the massive tripling of the capital expenditure outlay in the past 4 years resulting in huge multiplier impact on economic growth and employment creation,” she said.
As per the First Advance Estimates of National Income of FY 2023-24, presented along with the Finance Minister’s speech, India’s Real GDP is projected to grow at 7.3 per cent. This is also in line with the upward revision in growth projections for FY2023-24 by the RBI (in its December 2023 Monetary Policy Committee meeting) from 6.5 per cent to 7 per cent, prompted by strong growth in Q2 of FY2023-24.
Indian economy has demonstrated resilience and maintained healthy macro-economic fundamentals, despite global economic challenges. The International Monetary Fund (IMF), in its World Economic Outlook (WEO), October 2023, has revised its growth projection for India for FY2023-24 upwards to 6.3 per cent from 6.1 per cent projected in July 2023. This reflects increasing global confidence in India’s economic prowess at a time when global growth projection for 2023 remains unchanged at 3 per cent.
As per the IMF, India is likely to become the third-largest economy in 2027 (in USD at market exchange rate) and it also estimated that India’s contribution to global growth will rise by 200 basis points in 5 years. Moreover, various international agencies such as the World Bank, the IMF, OECD and ADB project India to grow between 6.4 per cent, 6.3 per cent, 6.1 per cent and 6.7 per cent, respectively in 2024-25.
In a major announcement, the Finance Minister said, the scheme of 55-year interest free loan for capital expenditure to states will be continued this year with total outlay of Rs 1.3 trillion. A provision of Rs 750 billion as 50-year interest free loan is proposed this year to support the milestone-linked reforms of Viksit Bharat by the State Governments.
With an intent to reduce fiscal deficit below 4.5 per cent by 2025-26, Sitharaman said, the fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP. The Interim Budget contains a number of announcements and strategies indicating directions and development approach for making India Viksit Bharat by 2047.
Making a slew of announcements, Nirmala Sitharaman said, the Government will pay utmost attention to make the eastern region and its people a powerful driver of India’s growth, PM Awas Yojana (Grameen) is close to achieving the target of three crore houses and two crore more houses will be taken up in the next five years to meet the requirement arising from increase in the number of families. Similarly, through rooftop solarisation, one crore households will be enabled to obtain up to 300 units free electricity every month.
According to the interim budget 2024-25, for India’s tech savvy youth, the government will establish a corpus of Rs one trillion with 50-year interest free loan. Nirmala Sitharaman said, “The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will also encourage the private sector to scale up research and innovation significantly in sunrise domains.” The government will also launch a new scheme for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’.
For railways, three major economic railway corridor programmes - energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors - will be implemented. Moreover, 40,000 normal rail bogies will be converted to the Vande Bharat standards to enhance safety, convenience and comfort of passengers.
The budget also proposes to establish coal gasification and liquefaction capacity of 100 MT to be set up by 2030.
On aviation sector, the number of airports have doubled to 149 and today five hundred and seventeen new routes are carrying 1.3 crore passengers. Indian carriers have pro-actively placed orders for over 1000 new aircrafts.
Nirmala Sitharaman announced that the Government will form a high-powered committee for an extensive consideration of the challenges arising from fast population growth and demographic changes and the committee will be mandated to make recommendations for addressing these challenges comprehensively in relation to the goal of ‘Viksit Bharat’.
Interim budget 2024
Budget 2024-25
Nirmala Sitharaman
railway corridor
cement corridors
port connectivity corridors
defence
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