NEW DELHI (Reuters) – The Indian government will spend a record 11.11 trillion rupees (about $134 billion) on infrastructure creation in 2024/25, to ensure the Asian nation remains one of the world’s fastest growing major economies.
The allocation for capital expenditure for the financial year starting April 1 is 11.1% higher than the capex for the current fiscal year, Finance Minister Nirmala Sitharaman said on Thursday in her budget speech.
The federal government’s capital expenditure as a percentage of GDP, which rose to 3.3% in 2023/24, is estimated at 3.4% in the next financial year.
“The additional allocation of INR 1.1 trillion for capex, taking it to INR 11.1 trillion, should provide continuity in the pace of infra creation and in bringing down the logistics cost in the country progressively,” Ranen Banerjee, partner and leader for economic advisory at PwC India, said.
The year-on-year increase in capex is lower than that seen this fiscal year.
For next fiscal, the government has made an outlay of 1.3 trillion rupees for 50-year loans to states for boosting their capital investments.
It had provided 1.3 trillion rupees for such loans in this fiscal. ($1 = 82.9900 Indian rupees)
(Reporting by Nikunj Ohri and Jaspreet Kalra; Editing by Mrigank Dhaniwala)
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