Budget 2024: Govt likely to increase capex to propel economic growth
₹10.2 lakh crore in FY25, implying a relatively sedate YoY expansion of about 10 per cent, compared to over 20 per cent expansion seen in each of post-COVID years. The slowdown in capex growth is likely to have some bearing on economic activity and GDP growth," said ICRA in its pre-Budget expectations. ALSO SEE: Budget 2024 full coverage During April-November of the current fiscal year, the capex rose by 31 per cent to ₹5.9 lakh crore (58.5 per cent of FY2024 BE) from ₹4.5 lakh in April-November FY23 (60.7 per cent of FY23 Prov).
For the current financial year, the government had made a record high provision of ₹10 lakh crore towards capex. For fiscal 2020-21, the government had earmarked ₹4.39 lakh crore which increased by 35 per cent to ₹5.54 lakh crore in the subsequent year. Another 35 per cent hike in capex was done in fiscal 2022-23 to ₹7.5 lakh crore which subsequently reached a high of ₹10 lakh crore, an increase of 37.4 per cent.
While the economic growth remained high, capital spending contracted in October 2023 (-14.9 per cent; first instance of contraction since April 2023) and then rose by a marginal 1.6 per cent in November 2023. Post COVID-19, the Budget has been laying special emphasis on capex. It has kick-started a dormant cycle for the economy.
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