Substantial capex hike unlikely in Budget: HDFC Securities CEO Dhiraj Relli
While the government has scope to accelerate capital expenditure given its current underspending, a substantial increase appears unlikely in the present economic climate, says Dhiraj Relli, MD & CEO at HDFC Securities.
Edited excerpts from a chat on Budget expectations, Trump presidency and investing strategy for 2025:
Do you think the Budget will have enough initiatives to boost consumption and maintain the capex trajectory? What are your expectations?
India's real GDP growth is projected to moderate to 6.4% in FY24-25 from 8.2% in FY23-24, amid softening urban demand and investment activity. The central government will likely undershoot its capital expenditure target by approximately Rs 1.4 trillion this fiscal year, contributing to an expected budgetary deficit of 4.8% in FY25—well below the budgeted 4.9%.
Against this economic backdrop, the upcoming Union Budget faces the critical challenge of balancing accelerated capital expenditure with consumption stimulus to sustain the country's growth momentum. Given the government's commitment to inclusive growth, the budget is expected to prioritize agriculture, MSMEs, household consumption, and job creation. Particular attention will be paid to measures boosting household spending, which accounts for over half of India's GDP.
The lower-than-planned capital expenditure (Rs 9.7 trillion versus Rs 11.1 trillion budgeted) creates fiscal space for enhanced infrastructure investment, particularly in roads, highways, and railways. We anticipate the budget will strike a
