New Delhi: The government will provide Rs 11.11 lakh crore towards capex for 2024-25, Finance Minister Nirmala Sitharaman said on Tuesday.
Presenting Union Budget for FY25, she stated that the government is aiming to maintain strong fiscal support for infrastructure projects for the next five years.
Sitharaman also noted that the government will facilitate investment grade energy audit of micro and small industries in 60 clusters.
The government has doubled spending on infrastructure over the past three years as a way to boost the economy. As a percentage of GDP), longer-term capital expenditure has risen to 3.4% in the current year from 1.7% in 2019-20.
Infrastructure spending, which generates demand across sectors from cement to steel and creates jobs, has a strong multiplier effect on the economy, economists say.
India’s economy expanded at a faster-than-expected pace of 7.8% in the March quarter, but Prime Minister Narendra Modi has faced criticism from analysts and political rivals for not creating enough jobs. This, in turn, has weighed on consumption, which forms 60% of India’s GDP, and held back private investment.
Market Reaction
India’s Nifty realty index extended gains after the government pledged support for urban housing in the budget. The index was last trading 1% higher.
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