Budget: FM announces 35% jump in FY23 capital expenditure to ₹7.50 lakh crore
Premium- 'The capex for FY23 will be 2.9% of the GDP. Effective capex of the central govt is estimated at 10.68 lakh crore which will be 4.1% of the GDP'
Finance minister Nirmala Sitharaman on Tuesday announced an increase in the capital expenditure for FY23 by a sharp 35.4% to a record ₹7.50 lakh crore from ₹5.54 lakh crore in FY22.
Presenting the Union Budget for 2022-23, Sitharaman said the capex was 2.2 times of the amount spent during the pre-pandemic levels (2019-20).
“The capex for FY23 will be 2.9% of the GDP. Effective capex of the central govt is estimated at 10.68 lakh crore which will be 4.1% of the GDP," Sitharaman announced.
Mint had earlier reported that the government was due to announce a sharp increase in capex to support growth and employment in the economy.
Sitharaman had earlier increased capex by a record 26% to ₹5.54 trillion in FY22, when compared with revised estimates of ₹4.39 trillion in covid-hit fiscal 2021.
The 35% increase in capex over FY22 has more than doubled the pre-pandemic budgeted capex of ₹3.4 trillion in FY20. The total capex from the budget stood at ₹3.16 trillion in FY19.
Government spending has shifted towards capital expenditure for the past few years as such spending helps push growth and jobs, and has a multiplier effect on the economy.
"Increase in capital expenditure by the central and state governments by one rupee each crowds in private investment, induces a more than proportionate increase in investment in the economy with benefits accruing over a few years," RBI had said in a note.
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