FY25 capital expenditure outlay may be hiked by 10%
FY25 capital expenditure outlay by 8-10% from the ₹11.11 lakh crore allocated in the vote on account when the full budget is presented thanks to better-than-expected tax revenue and a record surplus transfer by the RBI to the government.
«Both tax and non-tax revenue are expected to be better,» a senior official told ET. «Additional surplus transfer from RBI provides enough headroom to spend more.»
Finance minister Nirmala Sitharaman presented an interim budget in February as this is an election year. The results will be declared on June 4. The full budget is expected to be announced about a month after the new government is formed.
The RBI last week announced a ₹2.1 lakh crore surplus transfer to the Centre. The government could use a part of it to bolster capex in the current year, continuing with its public investment-led growth push to provide support to private investment that is beginning to trickle in.
'Small Increase to Make Sense'
India raised capex by 42% in FY22 and 24% in FY23. This was trimmed to 11.1% for FY25 in the interim budget from the budgeted capex in FY24, which was up 35.9% from previous year, in line with the government's fiscal consolidation glide path. The Centre intends to narrow its fiscal deficit to 5.1% in FY25 from 5.8% in FY24 (RE). Final numbers will be announced by the end of this month.
«It is not possible to match large increases of past few years in capex growth but some additional support can be provided,» the official said.
Earlier this month, citing a study by
