FM Sitharaman keeps FY25 capex target unchanged at Rs 11.11 lakh crore in Budget 2024

Finance Minister Nirmala Sitharaman on July 23 kept India’s FY25 capex outlay unchanged at Rs 11.11 lakh crore in the first Union Budget of the third Narendra Modi government -- the same as was earmarked in February. This is 16.9 percent higher than the last year’s revised estimate of Rs 9.5 lakh crore.

The government will end up spending 3.4 percent of the Budget on capex compared with 3.2 percent in the previous year, and almost double of what it spent five years ago.

The growth in capex has stayed in double digits in six of the last seven years and is likely to slow down from 28.4 percent growth experienced in FY24 and 24.8 percent in the year before.

Roads and railways claim the biggest slice of the capex pie -- their share inched up from just over 35 percent a decade ago to nearly 50 percent in FY24.

A frontloading of loans by the centre last year, helped push state capex by 30 percent in FY24.

Capital spending by the government was lower at 12.9 percent of the target compared with 16.8 percent in the previous year.

The government has spent up Rs 1.43 lakh crore in the first two months of the fiscal year so far.

Loan disbursal has outpaced last year’s pace with Rs 22,702 crore being given out by the state.