In a move aimed at further propelling economic growth, the Union government has elevated its capital expenditure (capex) allocation for the fiscal year starting 1 April 2024, to a monumental Rs 11.11 trillion.
This initiative is designed to fortify India's infrastructure and build upon significant increases in capex witnessed over recent years. The allocation underscores the government's commitment to revitalising the country's infrastructure, fostering employment opportunities, and driving overall economic growth.
The Interim Budget for the fiscal year 2024-25 (FY25) has earmarked Rs 11.1 trillion for capex, representing 3.4 per cent of the gross domestic product (GDP). This marks an impressive 11.1 per cent rise from the previous year's allocation of Rs 10 trillion, signalling a continued dedication to infrastructure development as a key driver of economic progress.
The capex has demonstrated a remarkable 37 per cent growth in the current fiscal year, following robust growth rates of 24 per cent in FY23 and 40 per cent in FY22.
This sustained upward trajectory is anticipated to provide vital support to ongoing infrastructure projects and stimulate increased private sector investment, aligning with the ambitious goals outlined in the Vision 2047 plan.
With aspirations to transform into a $5 trillion economy in the near future and achieve developed country status by 2047, India has identified infrastructure development as a linchpin for its growth strategy.
The budget's explicit focus on enhancing roadways, shipping, and railways, coupled with significant capital allocations for these sectors and related ministries, is geared towards realising the objectives set forth in the Vision 2027 plan.
According to the Infrastructure Year Book 2023 by Crisil, India plans to invest a staggering Rs 143 trillion in infrastructure from FY24 to FY30, more than doubling the Rs 67 trillion spent over the seven previous fiscal years since 2017.
This considerable investment will predominantly target roads and power, with emerging sectors such as electric vehicles, solar, wind, and hydrogen gaining substantial momentum, reports Mint.
In the infrastructure landscape, particularly the highways sector, 2023 witnessed accelerated growth following two years of moderate progress.
The budget for FY25 aims to sustain this momentum by proposing extensive highway construction projects, reaffirming the government's commitment to ushering in a new era of robust economic development through strategic infrastructure investments.
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