Capex Point: Capital Expenditure Target Up by 33% to Rs 10 Lakh Crore in Budget 2023

Finance Minister Nirmala Sitharaman on Wednesday presented the Union Budget for 2023-24 and raised the capital expenditure (capex) target by 33% to Rs 10 lakh crore, which will be 3.3% of the GDP.

The ratio of capex-to-GDP during the current financial year was 2.7% and is expected to be at 3.3% in the upcoming financial year.

“Capital investment outlay is being increased steeply for the third year in a row by 33% to Rs 10 lakh crore, which would be 3.3% of the GDP. This would be almost three times of the outlay in 2019-20," she said.

In the last Budget, the Finance Minister raised capital expenditure by 35.4% for the financial year 2022-23 to Rs 7.5 lakh crore. This was done to continue the public investment-led recovery of the pandemic-battered economy. The capex in the previous year was pegged at Rs 5.5 lakh crore.

She said that this substantial increase in recent years is central to the government?s efforts to increase growth potential, job creation, get private investment and provide cushion against global headwinds.

Sitharaman also said that the effective capital expenditure of the Union government is budgeted at Rs 13.7 lakh crore, 4.5% of the GDP.

“Newly established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure, harmonised master list of infra to be reviewed by an expert committee for recommending classification and financing," she said.

The Finance Minister also said that investment in infrastructure and productive capacity has a large multiplier impact on growth and employment. Post pandemic, private investment is rising again.

She also announced that the 50-year interest-free loan to state governments will be extended for one more year.

“The 50-year interest-free loan to state governments to be continued for one more year, to spur investment in infra and to incentivize them for complimentary policy actions, with enhanced outlay of Rs. 1.3 lakh crore," she added.

In what she called the “first Budget in Amrit Kaal", the finance minister said that 50 additional airports, helipads, water aerodromes and advanced landing grounds will be revived to improve regional air connectivity.

The last full Budget of the second term of the BJP-led NDA government ahead of the general elections in 2024 is Sitharaman?s fifth full Budget after she took over as Finance Minister in July 2019.

She said the government has outlined seven priority areas: inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.​

Read all the Latest Business News and Budget Live Updates here