Capital investment outlay increased to Rs10 lakh crore
01 February 2023
Union Budget 2023-24 proposes a steep increase in capital investment outlay to Rs10 lakh crore – envisioning capital investment as the driver of growth and jobs., finance minister Nirmala Sitharaman stated while presenting the Budget 2023-24 in Parliament today.
“This substantial increase in recent years is central to the government’s efforts to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds”, Sitharaman said.
The finance minister proposed to increase capital investment outlay for the third year in a row, by 33 per cent to Rs10 lakh crore, which would be 3.3 per cent of GDP and almost three times the outlay in 2019-20.
Effective capital spending
Sitharaman added that direct capital investment by the central government will be complemented by the provision for creating capital assets through grants-in-aid to states. She said the “Effective Capital Expenditure” of the centre has been budgeted at Rs13.7 lakh crore, or 4.5 per cent of GDP.
Interest-free loan to states
To spur investment in infrastructure and to incentivise states for complementary policy actions, the finance minister proposed to continue the 50-year interest free loan to state governments for one more year – with the outlay in this regard being enhanced significantly to Rs1.3 lakh crore.
Infrastructure finance secretariat
The finance minister noted that after the subdued period of the pandemic, private investments are growing again. To attract private investment in sectors predominantly dependent on public resources, Sitharaman said the newly-established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure sectors like railways, roads, urban infrastructure and power.