Interim Budget 2024

FM Nirmala Sitharaman: With 17% hike in outlay, Interim Budget focus still on capital expenditure

SECTIONSFM Nirmala Sitharaman: With 17% hike in outlay, Interim Budget focus still on capital expenditureET BureauLast Updated: Feb 09, 2024, 12:00:00 AM ISTRate StoryFollow usShareFont SizeAbcSmallAbcMediumAbcLargeSavePrintCommentSynopsis

Finance Minister Nirmala Sitharaman underscores the significance of capital expenditure in the FY25 interim budget, citing its economic multiplier effect. She highlights a 17% increase in capex outlay to ₹11.11 lakh crore, exceeding nominal GDP growth. Sitharaman asserts that robust capital spending drives infrastructure development, boosts employment, and enhances living standards. The Rajya Sabha passes key financial bills, affirming the government's fiscal course correction post-pandemic, without compromising welfare spending.

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Finance minister Nirmala Sitharaman on Thursday said the interim budget for FY25 has kept up focus on capital expenditure given its high multiplier effect, and the government has substantially bolstered such spending in recent years to first nurse a Covid-ravaged economy back to health and thereafter to sustain the high growth rate.

Sitharaman was replying to a general discussion on the interim budget for FY25 in the Rajya Sabha.

The minister highlighted that the capex outlay for FY25 has been raised by 17% upon the revised estimate for this fiscal to a record ₹11.11 lakh crore, and the rate of hike is higher than the budgeted nominal GDP growth of 10.5%.

The public infrastructure created through capex spurs economic growth, generates employment, connects farmers and small manufacturers to the markets and eventually leads to greater ease of living, she suggested.

The upper house on Thursday passed the Finance Bill, 2024, the Appropriation (Vote on Account) Bill, 2024, and relevant appropriation bills pertaining to both the central government and the Union territory of Jammu and Kashmir. The process of budget approval by the Lok Sabha is already over.

"With the capital expenditure being in the focus, in the last 3-4 years, we have made sure that our debt management is done in such a way that we honour the glide path for fiscal deficit that we had given in 2021," Sitharaman said.

The government has been able to walk the talk on its fiscal course correction pledge after the large pandemic spending without compromising on welfare expenditure, she said. In fact, it expects to rein in its FY24 fiscal deficit at 5.8% of GDP, better than the budgeted goal of 5.9%, she added.

Responding to questions of opposition members, Sitharaman stressed that allocations for social sectors, including education, health, minority affairs, rural development, tribal affairs, social justice and empowerment and women and child development, have been raised for FY25.

Responding to observations on India's poor ranking in the Global Hunger Index, Sitharaman said it is not a balanced approach to measure hunger.

She highlighted that the unemployment rate in rural India dropped to 2.4% in FY23 from 5.3% in FY18. The participation of women in the labour force expanded to 37% in FY23 from 23.3% in FY18, she added.


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( Originally published on Feb 08, 2024 )