Centre set to surpass FY25 capex target of Rs 10.18 lakh crore

New Delhi, April 6 (IANS) The government is poised to surpass its revised capital expenditure (capex) target of Rs 10.18 lakh crore for FY25 by a modest margin.

According to an NDTV Profit report on Sunday, citing a top official, “The data received so far indicates that we are likely to exceed the revised target by a significant margin in absolute terms”.

The capex target was lowered to Rs 10.18 lakh crore (revised estimates) in the Union Budget 2025-26, from Rs 11.1 lakh crore.

For current fiscal (FY26), a capex allocation of Rs 11.21 lakh crore has been set by the government.

According to Union Finance Minister Nirmala Sitharaman, the Indian economy will continue to be the world’s fastest-growing economy backed by the increase in the government’s capital expenditure in the Budget for 2025-26 and rising consumption levels, especially in the rural areas.

The effective capital expenditure works out to 4.3 per cent of the GDP in the Budget for 2025-26 while the fiscal deficit is 4.4 per cent.

“This indicates that the government is using the entire borrowed resources for financing effective capital expenditure, creating capital assets,” she pointed out.

The Indian economy is expected to clock 6.5 per cent growth in 2025-26, driven by government investment in big infrastructure projects, and an acceleration in private investment during the year, according to the latest EY Economy Watch report.

A Jefferies report said last month that there has been a significant increase in capital expenditure in India, with growth expected to continue in the coming months as several sectors witnessing strong investments.

The government’s focus on railways and road projects has helped achieve significant progress, with around 83-87 per cent of the financial year 2025 revised estimates already completed for these sectors.

The government's commitment to capital expenditure remains strong, with transfers to states rising by approximately 60 per cent. This financial support is expected to further accelerate infrastructure projects at the state level, boosting overall economic growth.

The capital outlay of the country’s top 15 states for FY26 is projected to rebound by 18 per cent (year-on-year) to Rs 7.2 lakh crore, driven by a post-election boost in capital spending, execution of infrastructure projects and continued allocation of Rs 1.50 lakh crore to states through interest-free capex loans in the Union Budget 2025-26, according to a CareEdge Ratings report.

—IANS

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