To push growth via infrastructure creation, Finance Minister Nirmala Sitharaman on Monday hiked the government's capital expenditure for FY 2021-22 by 34.5 per cent to Rs 5.5 lakh crore.

The government's planned capital expenditure for the current fiscal has been increased to Rs 4.39 lakh crore, as against the Budgeted Rs 4.12 lakh crore.

"Sharp increase in capital budget in BE 2020-21. We have provided for Rs 4.12 lakh crore for (capital) expenditure. It was our effort that in spite of resource crunch we should spend more on capital expenditure and we are likely to end this year at around Rs 4.39 lakh crore which we have provided in RE (revised estimate) of 2020-21," Sitharaman said in her 2021-22 Budget speech.

For the next fiscal, the minister proposed sharp increase in capital expenditure and provided Rs 5.54 lakh crore.

This is 34.5 per cent higher than Budget estimate of Rs 4.12 lakh crore in 2020-21.

"Of this I have kept a sum of more than Rs 44,000 crore in the Budget head of Department of Economic Affairs to be provided for projects, programmes or the departments that show good progress in capital expenditure and are in need of further funds," she said.

Over and above this expenditure, the government would also be providing more than Rs 2 lakh crore to states and autonomous bodies for their capital expenditure.

"We will also work out specific mechanism to nudge states to spend more of their Budget on the creation of infrastructure," Sitharaman said.