Budget 2024: Capex increased to Rs 1,111 crore, more power for infrastructure

In order to ensure more impetus for infrastructure development, promote economic growth and create employment, a large sum of Rs 1,111,110 million has been set aside as capital expenditure in the 2024 Interim Budget. Finance Minister Nirmala Sitharaman on Thursday said the expenditure in 2024 would be Rs 3.4 Cr. Percentage of GDP.

“Building on the substantial two-fold increase in capital expenditure over the past four years, which has had a huge multiplier impact on economic growth and job creation, expenditure next year will increase by 11.1 per cent to Rs 11,11,111 crore. This will contribute to GDP ( 3.4% of GDP,” she said.

It is worth noting that the interim budget is only valid for the first four months of the 2024-2025 fiscal year. The Lok Sabha elections will be held around April-May and a complete budget will be presented after the new government is formed. The interim budget is simply a vote in parliament to approve early funding to meet coalition government spending.

The finance minister said the government is aware that the middle class is expanding rapidly and urbanization is developing rapidly. “Metros and NaMo Bharat can be the catalyst for needed urban transformation. Expansion of these systems will be supported in large cities with transit-oriented development,” she said.

Regarding the aviation industry, she said the number of airports in the country had doubled to 149 in the past 10 years. “The aviation industry has boomed in the past 10 years… The introduction of air connectivity to tier-II and tier-III cities under the UDAN (Ude Desh ka Aam Nagrik) scheme has been common. At least 517 new routes carrying 1.3 lakh passengers,” she added.

Air India has aggressively placed orders for more than 1,000 new aircraft. Sitharaman said expansion of existing airports and development of new airports will continue at a rapid pace.

Among the ministries, the defense ministry received an allocation of Rs 6.2 billion, followed by road transport and highways, which received an allocation of Rs 2.78 billion. Railways is at the third position with an allocation of Rs 255 crore.

Last year, when the finance minister presented the Union Budget 2023-24, the capital expenditure (capex) target was increased by 33% to Rs 1,000 crore, or 3.3% of GDP. This comes after she raised capital expenditure in 2022 by 35.4% to Rs 750 crore for the financial year 2022-23.