Interim Budget 2024-25: Govt raises Capex allocation to Rs 11.1 lakh cr

This is an 11.1% increase in FY24’s Budget estimate and 16.9% higher than the revised estimate.

It is noteworthy, that the government was planning to spend Rs 10.01 lakh crore in FY24 but missed the target by Rs 50,715 crore, mainly due to poor utilisation by states of the capex loan scheme for them.

Although the budget initially earmarked Rs 1.3 lakh crore for the Special Assistance as Loan to States for Capital Expenditure scheme in 2023-24, the revised estimate has increased significantly to Rs 10.56 lakh crore.

For the upcoming fiscal year 2024-25, the government has maintained the flow of funds to the scheme at Rs 1.3 lakh crore, which involves providing interest-free loans to states exclusively for capital expenditure and has a tenure of 50 years.

The projected capital expenditure for the fiscal year 2024-25 by the Central government is Rs 11.11 lakh crore.

However, when factoring in grants-in-aid for the development of capital assets, which include allocations for demand-driven schemes like the Mahatma Gandhi National Rural Employment Guarantee Act scheme, the effective capital expenditure increases to Rs 14.97 lakh crore.

This marks a notable rise from the revised estimate of Rs 12.71 lakh crore in the previous fiscal year 2023-24.